American Electric Power (NYSE:AEP) utility Public Service Co. of Oklahoma (PSO) said Feb. 4 that the Oklahoma Corporation Commission (OCC) has approved cost recovery for three wind power contracts that should lock in historically low wind energy prices for years.
The 20-year contracts involve wind units under development near Seiling, Balko and Goodwell, which are located in the northwest and the panhandle areas of the state.
On Oct. 10, 2013, PSO announced the signing of new wind power agreements totaling nearly 600 MW, which is enough to power more than 120,000 homes. Last month, an OCC administrative law judge recommended approval of PSO’s requested cost recovery to the full three-member commission.
PSO issued a request for proposals (RFP) in June 2013 seeking up to 200 MW of new wind energy resources. The decision to contract for an additional 400 MW was based on prices for wind energy, which were at all-time lows, the utility said.
When deliveries of energy from the three new wind contracts commence in 2016, PSO’s total wind under contract will be 1,137 MW.
Estimates show the agreements will reduce customer costs by $53m in the first year, with annual savings growing over the 20-year length of the contracts, the AEP subsidiary said.
“These contracts were based on extraordinary pricing opportunities that will provide substantial savings for our customers,” said PSO President and COO Stuart Solomon. “Another benefit is the diversity that an additional 600 megawatts of Oklahoma wind energy will bring to our fuel mix.”
All three of the wind projects are roughly 200 MW.
Balko Wind, is owned by Apex Clean Energy Holdings, and located in Beaver County, Okla. Seiling Wind is owned by a NextEra Energy (NYSE:NEE) subsidiary and located in Dewey County. Goodwell Wind Project is owned by TradeWind Energy and located in Texas County, Okla.
The Oklahoma Energy Security (OES) Act of 2010 set a goal that 15% of all installed electric generation capacity within the state of Oklahoma be generated from renewable energy by 2015. The state has already exceeded that goal, according to the OCC website.