QUESTION: The newspaper had an article about SWEPCO announcing plans for a wind-power generating operation. Is this related to the big wind power project that was rejected a year or so ago? And will it raise or reduce electricity rates?
ANSWER: AEP-Southwestern Electric Power Co. says customers’ bills will decrease starting in 2021 as a result of the proposed new wind projects.
About a year ago, AEP withdrew plans for the $4.5 billion Wind Catcher project when it failed to receive approval in Texas. The company had chosen Chicago-based Invenergy to build the facility. Invenergy describes itself as a company that develops, owns and operates “large-scale sustainable energy generation and storage facilities in the Americas, Europe and Asia.”
And I guess that counts as a connection, because that same firm, Invenergy, would build the newly proposed wind facilities that SWEPCO, along with its sister company Public Service of Oklahoma, want to purchase as part of the new wind project.
SWEPCO is seeking regulatory approval in Texas, Louisiana and Arkansas to purchase the three wind farms in Oklahoma that would provide SWEPCO with 810 megawatts of power. (Public Service of Oklahoma is seeking its own approvals and would own part of the farms as well.) The farms would be in a different area of the state than the Wind Catcher project would have been. Filings with the Texas Public Utility Commission indicate the wind farms would cost about $1.996 billion, including closing and other costs.
“Wind Catcher was a very different project,” said SWEPCO spokesman Peter Main. The Wind Catcher project also had another “major component” — AEP’s planned construction of a line to connect the wind farm from western Oklahoma to the Tulsa area. Also, the current project consists of three wind facilities instead of one.
“These facilities are closer to ... our part of the transmission grid,” Main said. “They will interconnect to the local utilities that are there rather than having to run the extended line from the far western Panhandle of Oklahoma to Tulsa.”
This project really is just now starting to make its way through the regulatory process, so I’m sure we’ll learn more specifics as the project proceeds.
The company’s filings with the Texas Public Utility Commission indicate it expects to seek to recover the cost to purchase the wind facilities, but on the other side, Main said the project is expected to save SWEPCO’s entire customer base $2 billion over the course of the wind farms’ 30-year life span. (SWEPCO has 536,300 customers, including 185,500 in Texas.)
“The primary drivers for the savings are that wind has no fuel costs associated with it,” Main said, and there are tax credits for wind facilities that provide “substantial savings” that are passed directly to customers.
“That cost (to purchase the wind facilities) is more than offset by the savings in fuel,” Main said. “The savings in fuel reduces the overall fuel cost for all of our generation to all of our customers, so that’s where the savings comes in. Customers’ bills should begin to see a decrease in 2021, with the completion of the first of the three wind facilities and then further in 2022 when all three facilities are in service.”
SWEPCO’s filing with the state includes provisions for what will happen if some of the regulatory authorities don’t approve the project, while others do, with a statement that any jurisdiction that does not approve the project will not help pay for it or benefit from it.
ANSWER LINE NOTE: Please accept my apologies. Thursday’s Answer Line included a chart showing the estimated schedule for the city of Longview’s 2018 bond projects that was too small for any of us to read. We’ve printed it again today.