Utility to challenge ALJ’s adverse ruling on 2,000-MW wind farm

Public Service Co. of Oklahoma plans to soon file exceptions to an Oklahoma Corporation Commission law judge's recommendation that the American Electric Power subsidiary should not be allowed to charge ratepayers for its portion of the $4.5 billion, 2,000-MW Wind Catcher project being built by Invenergy LLC in the Oklahoma panhandle.

In her report, Mary Candler, the ALJ, concluded PSO failed to prove "that this project meets an economic need sufficient for pre-approval of this project. PSO's economic analysis used unreasonable data and utilized a flawed planning process."

PSO proposes to own 30% of the project with Southwestern Electric Power Co., also owned by Columbus, Ohio-based AEP, controlling 70%. PSO also wants to construct a 765-kV transmission line to deliver electricity from one of the world's largest wind farms to its customers.

The wind farm is scheduled for commercial operation by the end of 2020.

PSO spokesman Stan Whiteford said the utility disagrees strongly with Candler's claims that the project contains risky elements, including the risk of cost-overruns or the complete failure of the generation tie line.

The ALJ also took aim at PSO's "failure to utilize competitive bidding for two extremely large purchases" that are part of the project.

PSO's explanation that it did not have enough time for competitive bidding "is not sufficient in light of the significant cost to be borne by PSO customers," she added. PSO customers would be charged for about $1.36 billion as part of the utility's minority investment in Wind Catcher.

Whiteford, though, said Candler missed the boat in determining that Wind Catcher's potential benefits do not exceed its costs.

By February 24, he said, PSO intends to file exceptions that are expected to be heard by the commission on March 14.

"That gives us the opportunity to specifically address what the ALJ had in her report," he said. "We're extremely disappointed [the report] overlooked some of the evidence that we put forward," that the project is contrary to the interest of PSO customers.

"We think we demonstrated that Wind Catcher is good for customers," he continued. "We're hopeful that the commissioners will reject the ALJ report and approve a cost recovery mechanism for the project so we can share those extraordinary savings."

Five years ago, Ohio regulators rejected AEP's 50-MW Turning Point solar project proposed for Noble County, Ohio. At the time, it would have been the largest US solar project east of the Rocky Mountains.

The ALJ's recommendation is non-binding, and commission spokesman Matt Skinner could not predict when a final vote will be taken on PSO's request.

Whiteford said the utility hopes for an OCC decision in late March or early April.

The ALJ, however, is not the only Oklahoma critic of PSO's participation in Wind Catcher. Oklahoma Attorney General Mike Hunter contends the project would result in a net cost to customers of at least $320 million.

Wind Catcher would play a major role in AEP's overall goal of reducing carbon dioxide emissions from its power plants by 60% from 2000 levels by 2030 and 80% from 2000 levels by 2050.

AEP's resource plans include adding 3,065 MW of solar generation and 5,295 MW of wind generation to its portfolio by 2030.

During the company's recent quarterly earnings call, AEP chairman, president and CEO Nicholas Akins said Wind Catcher would deliver nearly 9 million MWh of low-cost wind energy annually to AEP customers in Oklahoma, Arkansas, Louisiana and Texas.