Oklahoma Wind Power Grows with Contracts for Three New Projects

---

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Wind power is growing in Oklahoma, as developers and utilities race to begin projects that will qualify for the federal Production Tax Credit (PTC). In recent weeks, utilities and developers have signed power-purchase agreements (PPAs) for about 700 megawatts (MW) of new wind generation in the Sooner State.

Last month, Western Farmers Electric Cooperative (Anadarko, Oklahoma) signed a PPA with Apex Clean Energy Incorporated (Charlottesville, Virginia) for 100 MW of wind power from Apex's Balko Windfarm, which is scheduled to be built in the Oklahoma panhandle. That deal was followed a month later by a separate PPA for 200 MW from that windfarm, which Apex signed with Public Service Company of Oklahoma (PSO) (Tulsa, Oklahoma), a unit of American Electric Power Company (NYSE:AEP) (AEP) (Columbus, Ohio).

"The Balko wind project will generate 300 MW of clean, renewable, homegrown energy in Oklahoma," said Mark Goodwin, president of Apex, in a statement. "The Balko wind project is located in one of the best wind resource areas in the country. Balko is a high-quality project, and now it will provide clean, domestic, renewable power to thousands of Oklahoma families."

Construction of the Balko wind project is scheduled to begin next year. Apex has not yet selected an engineering, procurement and construction (EPC) firm for the windfarm. The developer declined to say what turbines would be used in the project.

In addition to the PPA with Apex, PSO also signed two other deals in October for about 400 MW of new wind generation:

• 200 MW from the Mammoth Plains Windfarm, which is being developed by NextEra Energy Resources LLC, a unit of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida). That project, scheduled to be built in Dewey County, has an estimated total investment value (TIV) of $457 million.
• 200 MW from the Goodwell Wind Project LLC, owned by TradeWind Energy Incorporated (Lenexa, Kanas). Located in Texas County, construction is expected to begin in early 2015. The TIV is expected to exceed $300 million.

Industrial Info is tracking 15 wind projects under development in Oklahoma valued at $5 billion. Industrial Info does not expect all to begin construction according to their original schedules, but the number of projects suggests a high level of project development activity in the Sooner State. Oklahoma's biggest wind projects under development include:

• North Buffalo Grassroot Windfarm, a 765-MW project valued at $1.5 billion. This project is being developed by Gestamp Wind North America, a unit of Gestamp Wind (Madrid, Spain)
• Kay Wind Project, a 300-MW, $600 million project being developed by Apex Clean Energy
• Kingfisher Grassroot Windfarm, a 300-MW, $570 million project also being developed by Apex Clean Energy
• 25 Mile Creek Grassroot Windfarm, a 200-MW, $460 million project being developed by Berrendo Wind Energy (Boulder, Colorado)
• Mustang Run Windfarm, a $350 million,150-MW project being developed by TradeWind Energy LLC
• Keenan Windfarm Phase III addition, a 100-MW, $200 million project being developed by Competitive Power Ventures Incorporated (Silver Spring, Maryland)

When it issued a request for proposal (RFP) for wind energy this past June, Public Service Company of Oklahoma planned to contract for up to 200 MW. But it ended up contracting for an additional 400 MW because there were "extraordinary pricing opportunities that will lower costs for PSO's customers by an estimated $53 million in the first year of the contracts," the utility said in a statement.

"With these long-term power purchase agreements, we're adding a significant amount of Oklahoma wind energy, bringing more diversity to our fuel mix, and doing so at a price that will provide substantial savings for our customers," said Stuart Solomon, PSO president and chief operating officer.

PSO will begin receiving electricity from all three projects on January 1, 2016. When those deliveries begin, the utility will have a total of 1,137 MW of wind power under contract.

"These were the best prices for renewables that's we've ever seen," PSO spokesman Stan Whiteford told Industrial Info. "They were comparable to coal. Whenever we consider renewable energy, price is very important. We think about what we can do that would make sense for our customers." Whiteford confirmed all three wind projects will be eligible for federal PTCs.

Oklahoma has set a voluntary goal that 15% of the state's electricity will come from renewable energy by 2015, Whiteford continued. "Renewables account for about 15% of PSO's electricity now, and these 600 MW of new wind projects will bring us to about 20%," he said in an interview.

The 600 MW of new wind capacity coming to PSO will help the utility offset the generation it will lose in 2016 when it closes Unit 4 of its Northeastern Power Station, which has generating capacity of about 450 MW. The generator is located in Oologah, Oklahoma.

Right now, Oklahoma has about 3,134 MW of operating windfarms, making it the sixth-largest in the nation for installed wind capacity, according to Apex. About 10.5% of the state's electricity comes from wind power, and Oklahoma has the nation's ninth-best wind resource. The U.S. Department of Energy (DoE) (Washington, D.C.) predicts that Oklahoma will be the second-largest generator of wind energy by 2030.

Speaking about his company's PPA with PSO, TradeWind Chief Executive Officer Rob Freeman said: "Oklahoma's natural resources and the leadership of lawmakers have made it an ideal state for wind-energy investment. Oklahoma's thoughtful policies have helped encourage development of a resource that is mutually beneficial to ratepayers, local communities and the environment."

"Wind energy provides low-cost power at a fixed price and gives utilities stability against fuel volatility," added Geoff Coventry, TradeWind's chief operating officer. "We're pleased to demonstrate again that wind energy is lowering the cost of power for businesses and consumers."

The Goodwell windfarm will be TradeWind's third wind project in the Sooner State. When Goodwell is operational by late 2015, TradeWind will have built 585 MW of windpower in Oklahoma, the company said.

View Plant Profile - 3098569 1009162 1084211 3107426 3071600 1088660 3029728 1083628
View Project Report - 300131102 8001704 300141993 300089059 200003891 300037106 8001700

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.