AEP Hopes to Invest in Big Windpower

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Researched by Industrial Info Resources (Sugar Land, Texas)--American Electric Power's (NYSE: AEP) (AEP) (Columbus, Ohio) proposal to purchase a 2,000-megawatt windfarm that is under development in the Oklahoma panhandle was a main topic of the company's recent earnings presentation. Valued at more than $4 billion, the Wind Catcher Energy Connection project is being developed by Invenergy LLC (Chicago, Illinois). A 350-mile dedicated, extra-high voltage power line project is also part of the plan.

Invenergy is touting Wind Catcher as the largest windfarm project in the U.S. and the second-largest in the world. AEP's utility subsidiaries, Public Service Company of Oklahoma (PSO) and Southwestern Electric Power Company (SWEPCO), are asking utility regulators in Arkansas, Louisiana, Oklahoma and Texas to approve plans to purchase the facility upon its completion, which is expected in 2020. Approval by the Federal Energy Regulatory Commission (FERC) is also required. The windfarm will utilize 800 2.5-megawatt (MW) General Electric turbines. For more information, see Industrial Info's project report.

The windfarm and an accompanying 765-kilovolt transmission line are expected to save SWEPCO and PSO customers more than $7 billion, net of cost, over 25 years, according to a press statement by Invenergy.

AEP Chief Executive Officer Nicholas Akins said during the company's earnings presentation that the project is currently not in the company's capital budget, and that financing details will be worked out as talks with regulators progress, he said.

Not including the Wind Catcher project, Industrial Info is tracking more than $2.7 billion in active capital projects by AEP.

Akins also noted that the rationalization of its competitive generation business in Ohio continued in May with the sale of its share of the 1,394-MW Zimmer Plant to Dynegy Incorporated (NYSE:DYN) (Houston, Texas) and a corresponding purchase of Dynegy's share of the 814-MW Conesville Power Station Unit 4. The sale-and-purchase deal consolidates the ownership of each unit with its respective operator, enabling better planning and decision making, according to AEP.

AEP has proposed to retire units 5 and 6 at Conesville, totaling 800 MW, no later than the end of 2022. The retirements of those two units, along with the planned retirement of its 600-MW Stuart System next year, will take AEP's Ohio fleet down to just two coal-fired units, Akins said.

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