Texas regulators deny SWEPCO’s application to add 810 MW of wind energy

The company on July 2 said that while Texas regulators rejected the proposal, the full project will proceed to serve SWEPCO’s customers in Arkansas and Louisiana

American Electric Power’s (AEP) Southwestern Electric Power Co., (SWEPCO) on July 2 said that the Public Utility Commission of Texas has denied approval of the company’s plan to add 810 MW of wind energy.

The company noted that while the commission rejected the proposal, the full project will proceed to serve SWEPCO’s customers in Arkansas and Louisiana, based on regulatory approvals previously received in those states.

As TransmissionHub reported, the Louisiana Public Service Commission in late May approved the terms of a settlement agreement reached in March by all parties in a proceeding regarding the wind project, including SWEPCO; commission staff; the Alliance for Affordable Energy; and Walmart, Inc.

SWEPCO also said on May 27 that as part of that settlement, it plans to issue a request for proposals for up to 200 MW of solar generation resources to be located in the company’s service territory, with construction beginning in the next three years, under regulatory requirements and review.

The company noted that its wind project includes the acquisition of three wind facilities in north central Oklahoma — known as the North Central Energy Facilities — in conjunction with its sister company, Public Service Company of Oklahoma (PSO), which in February received final Oklahoma Corporation Commission approval of a settlement agreement in its plan to add 675 MW of wind energy.

SWEPCO said in its May statement that the Louisiana commission approved an option that could increase Louisiana’s allocation to an estimated 464 MW from the original 268 MW. The company added that the Arkansas Public Service Commission also accepted an option to increase that state’s allocation when it approved the project earlier this month.

SWEPCO President and COO Malcolm Smoak, in the company’s July 2 statement, expressed disappointment over the Texas commission’s decision, adding, in part, that that decision “does not affect the project’s full viability. We appreciate the approvals we received from the Arkansas Public Service Commission and the Louisiana Public Service Commission, and we look forward to bringing this low-cost renewable energy to our customers in Arkansas and Louisiana.”

SWEPCO said that it will own 810 MW, or 54.5%, of the 1,485-MW project with an investment of about $1bn. SWEPCO said that it and PSO will acquire the projects at their completion over the next two years.

As noted in the Texas commission’s order, which is dated July 2, the wind generation facilities will be located in north central Oklahoma, and are described as such:

  • The 999-MW Traverse project has a planned commercial operation date of 2021, with SWEPCO’s share being 544.5 MW
  • The 287-MW Maverick project has a planned commercial operation date of 2021, with SWEPCO’s share being 156 MW
  • The 199-MW Sundance project has a planned commercial operation date of 2020, with SWEPCO’s share being 108.5 MW

The estimated total installed capital cost for the wind generation facilities is about $2bn, the commission said.

The commission said that SWEPCO modeled the customer savings of the wind generation facilities, using a base case — with and without a carbon tax — along with sensitivities based on higher and lower gas and power price forecasts, a lower level of energy production for the wind generation facilities, and cases based on higher-than-expected congestion costs that resulted in construction of a generation tie line (gen-tie).

Among other things, the commission said, “SWEPCO did not demonstrate that, under a reasonable range of assumptions, SWEPCO’s acquisition of the wind generation facilities will provide benefits to customers.”

About Corina Rivera-Linares 2931 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.