Louisiana utility regulators approved plans Wednesday for a $4.5 billion Oklahoma wind energy project, acting about six weeks after Arkansas’ Public Service Commission gave its approval to the project, known as the Wind Catcher Energy Connection.
While regulators in Texas and Oklahoma still must pass judgment on the project, which would bring wind energy from the Oklahoma panhandle to some 117,000 western Arkansas homes and businesses serviced by Southwestern Electric Power Co., the two state approvals are considerable boosts to the project’s chances, observers said.
Plans for Wind Catcher, which include a 4,000-worker construction effort to put up 800 massive wind turbines on 300,000 acres, would be 70 percent-owned by Swepco, with its sister company, Public Service Co. of Oklahoma, owning the other 30 percent. Its 2,000-megawatt energy production would also be split 70-30 by the companies, both subsidiaries of American Electric Power of Columbus, Ohio.
“Wind Catcher is a major investment in clean energy that will produce long-term savings for Louisiana customers and further diversify our energy resource mix,” Nicholas K. Akins, AEP’s CEO and chairman, said in a statement. “After an extensive review, including the significant performance guarantees that were developed during the process, the Louisiana Public Service Commission’s decision recognizes the benefits Wind Catcher will bring.”
As it did in Arkansas, the utility companies reached a settlement agreement in Louisiana that assures a cap on construction costs, qualification for 100 percent of available federal Production Tax Credits, and a minimum annual power production commitment.
Swepco expects the project to save its customers $4 billion over the 25-year lifespan of the wind farm compared with the projected cost of buying power on the open market.
The utilities’ plan, which also calls for a 360-mile dedicated power line to deliver the energy from the panhandle to join the existing power grid near Tulsa, was approved in a 4-1 vote by the Louisiana commission, which requires four votes for approval. Arkansas’ three-member commission gave its approval on May 8, and Chairman Ted Thomas said later that the decision wasn’t a close call.
“You don’t want all your eggs in one basket, so that’s why we want diversity in our sources of generating electricity,” Thomas told Arkansas Business this month.
Some blades and components of the project’s 800 windmills would be made in Arkansas by GE Renewable Energy, officials say.
The project has faced resistance in the form of hundreds of thousands of dollars’ worth of negative advertising and public relations campaigns in all four states where it faced regulatory scrutiny. Money for TV ads and PR campaigns fighting the project have been financed by sources tied through official documents to fossil fuel interests and several Arkansas lobbyists.
The project is billed as the largest single-site wind development in the United States, developed by Invenergy LLC of Chicago. Unlike the moribund Clean Line, a wind energy transmission project that would have crossed Arkansas with 200-foot-high power lines, alarming landowners with the prospect that property would be subject to eminent domain seizure, Wind Catcher will have no physical manifestation in Arkansas.
Opponents have focused instead on a message that the project’s backers are promising too much. They fear the costly wind farm could stick customers with higher bills, particularly if the already low price of natural gas should plunge. They say relying on federal tax credits is risky, and doubt the utilities will realize the $7 billion in ratepayer savings they expect over a quarter-century.
But Thomas said diversifying Swepco’s generation fuel mix is a good bet even if gas prices do fall. Electricity customers may pay a little more for wind power than they would if all generation were gas-driven, but renewables will act as a hedge in case gas prices rise instead, he said.
“I think Louisiana will go next,” Thomas predicted. “I think it’s an if-you-do-it, we’ll-do-it sort of thing. And I think it will get there, though there are some serious questions. Scale is a big part of this business.”
Beyond hedging against price shifts, Wind Catcher will also insure against any new federal policy on carbon emissions, which are unlikely in a Trump administration but may not be so far-fetched over the coming decades.
Along with state approvals, Wind Catcher must also get the go-ahead from the Federal Energy Regulatory Commission. Beyond its 117,000 customers in Arkansas, Swepco serves 231,000 homes and businesses in Louisiana.