Southwestern Electric Power Co., which provides electricity to 113,000 customers in western Arkansas, is ready to reap the wind, or at least its power, from one of the biggest clean energy projects in the world.
The company announced Wednesday that it and a sister utility plan to buy the nation's largest wind farm, the $4.5 billion Wind Catcher project in the Oklahoma Panhandle, pending regulatory approval.
Under the plan, SWEPCO would own 70 percent of the 2-gigawatt facility, the second largest in the world, and Public Service Co. of Oklahoma would own 30 percent. The sale is scheduled to take place after the wind farm has been built by power development company Invenergy LLC and General Electric Co. Construction, which has already begun, is scheduled to be complete in the fourth quarter of 2020.
The power plant plan, which includes a 350-mile transmission line to Tulsa also to be owned by SWEPCO and PSO, will result in electric-bill savings of about $5 billion, net of cost, for SWEPCO's 530,000 total customers over its 25-year lifetime.
SWEPCO also serves Louisiana, where it is based in Shreveport, and Texas. It and PSO are subsidiaries of American Electric Power, one of the largest electric utility companies in the United States. In total, the wind farm will provide power to 1.1 million customers in the region and will move SWEPCO much closer to a target of 2,000 megawatts of renewable energy capacity by 2034. SWEPCO's share of the wind power will amount to 1,400 megawatts, and the company's share of the purchase cost will be $3.2 billion.
"This is an exciting opportunity to provide a significant amount of clean, renewable energy and long-term cost savings for SWEPCO customers, said Venita McCellon-Allen, the company's president and chief operating officer. "We are working to meet the future energy needs of our customers in the cleanest, most efficient and cost-effective ways possible, and at the same time continuing to diversify our energy resource mix."
GE Renewable Energy, which is providing 800 2.5-megawatt wind turbines for the facility, which straddles Cimarron and Texas counties in Oklahoma, expects to use a "significant number" of turbine blades, towers and generator frames to be manufactured in Arkansas, Louisiana and Texas. In a press statement, AEP said the project, which has been endorsed by environmentalists and advanced energy advocates, will support 4,000 direct jobs and 4,400 indirect jobs during construction, and 80 permanent jobs once it comes online.
The project is subject to regulatory review in Arkansas, Louisiana, Oklahoma and Texas, as well as the Federal Energy Regulatory Commission.
SWEPCO said it plans to file an application with the Arkansas Public Service Commission on Monday, and PSC Executive Director John Bethel said he expected the review process to take six to 12 months. The commission's task will be to "find out if we agree that this is a good resource for Arkansas customers, and whether it is cost-effective," Bethel told Arkansas Business.
A SWEPCO news release said that once the project is completed, renewable energy will rise from 9 percent to 29 percent of its energy resource mix. "This is the largest single-site wind project in the United States," McCellon-Allen said. "The dedicated power line will deliver the renewable energy efficiently, reliably and cost-effectively to our customers, significantly reducing what are known as congestion costs for the use of existing power lines."
Environmental groups like the Sierra Club joined in applauding the announcement. "Adding a large amount of clean wind energy will reduce the amount of dirty coal burned by SWEPCO's coal plants, because coal can't compete with these low prices for wind," said Glen Hooks, director of the Arkansas Sierra Club chapter. "We commend SWEPCO for taking advantage of abundantly available cheap wind, which will benefit its customers in both lower electric bills and cleaner air."