Wind Catcher will benefit Arkansas customers, economy

by Brian Bond (tbbond@aep.com) 291 views 

Seven months after Southwestern Electric Power Company announced the Wind Catcher Energy Connection project, a couple of unknown groups have popped up to oppose lower electric rates and more renewable energy for SWEPCO customers in Arkansas.

In a recent guest column, Grant Tennille, spokesman for the unknown group Renewable Arkansas (RenewableAR), questions the economics of the project and SWEPCO’s motives.

The $4.5 billion Wind Catcher project includes acquisition of a 2,000-megawatt wind farm under construction in the Oklahoma Panhandle and construction of a 360-mile dedicated generation tie line to the Tulsa area, where the existing electrical grid will deliver the wind energy to SWEPCO’s customers in Arkansas, Louisiana and Texas.

SWEPCO will own 70 percent of the project. SWEPCO’s sister company, Public Service Company of Oklahoma (PSO), will own 30 percent. We anticipate that the project will save SWEPCO customers more than $4 billion over the 25-year life of the wind farm.

In addition to the economic benefits associated with lower electric prices for Arkansas customers, a significant number of wind turbine blades will be manufactured in Arkansas. The project will consist of 800 turbines that require three blades per turbine.

Mr. Tennille emphasizes the cost of the new facilities, but leaves out the other side of the equation, which is the fuel savings that will more than offset the cost. This will result in the significant savings for customers over the 25 years of the project. Customer savings will come from no fuel cost for wind, which lowers SWEPCO’s overall fuel and purchased power costs; the full value of the federal Production Tax Credits, which are available for construction of new wind farm projects; and the cost-efficient delivery of the wind generation to customers through the new, dedicated power line.

Details about the economics of the project have been under careful scrutiny at the Arkansas Public Service Commission since SWEPCO filed its application for the project in July 2017. That review includes analysis of a variety of stakeholders’ concerns, including natural gas costs mentioned by Mr. Tennille.

After a series of negotiation sessions with the APSC General Staff, the Arkansas Attorney General and other parties, SWEPCO agreed to provide a number of guarantees, including a cap on construction costs, qualification for 100 percent of the federal Production Tax Credits, minimum annual energy production from the project, and others. With these guarantees, we are demonstrating our commitment and ability to deliver the benefits of Wind Catcher to Arkansas customers.

On Feb. 20, SWEPCO, the APSC General Staff, the Attorney General, and Walmart Stores, Inc. and Sam’s West, Inc. filed a joint motion asking Commissioners to approve the project under terms of the settlement agreement. The Commission conducted an evidentiary hearing on March 1.

The settlement agreement, including all these guarantees, was announced publicly almost three weeks before Mr. Tennille’s column was published.

Mr. Tennille also asserts that SWEPCO will somehow benefit from the continued operation of its other power plants with merchant sales outside the SWEPCO system. That issue is also addressed in the settlement agreement with a guarantee that 100 percent of any incremental off-system sales margins will flow through to customers, not to SWEPCO, resulting in additional customer savings. We certainly plan to continue operating our existing plants in Arkansas and elsewhere as part of our diverse energy resource mix – for the benefit of SWEPCO customers.

There’s not much information out there about RenewableAR. The group appears to advocate for solar development in Arkansas.

SWEPCO has a responsibility to choose economic energy resources to serve its customers. Wind Catcher is a timely opportunity to deliver renewable energy to customers at almost half the price of a large-scale solar project in Arkansas. That doesn’t rule out solar for the future, but it means Wind Catcher provides a significant advantage today.

SWEPCO is also facing the heavily funded campaign of another unknown group opposing the Wind Catcher project. Protect Our Pocketbooks – which refuses to reveal the names of its backers or the sources of its substantial funding – is pressing its case in both Arkansas and Louisiana. Since apparently no one has been able to determine who they are, one has to wonder whose pocketbooks they are really protecting.

SWEPCO has been serving Arkansas customers for more than 100 years. Our objective with the Wind Catcher project is to save money for our customers while providing more renewable energy. Many customers – such as Walmart, the City of Fayetteville and the University of Arkansas – have sustainability and renewable energy goals. The Wind Catcher project will help meet those goals and benefit all SWEPCO customers. Cost savings for our Arkansas customers will benefit the families, businesses and the communities we serve. Affordable electricity is vital for economic development and growth. Manufacturing of wind turbine components will also boost the Arkansas economy.

SWEPCO and PSO continue to demonstrate the value that Wind Catcher will bring to our customers as we work toward regulatory approval of this important project in Arkansas, Louisiana, Texas and Oklahoma. I hope folks will go to SWEPCO.com/WindCatcher to get more facts about the project.
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Editor’s note: Brian Bond is vice president-external affairs for Southwestern Electric Power Company. The opinions expressed are those of the author.

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