Oklahoma Windfarm Faces Setback from Judge

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Researched by Industrial Info Resources (Sugar Land, Texas)--The 2,000-megawatt (MW) Wind Catcher windfarm being developed in Oklahoma faced a setback this week when an Oklahoma judge said American Electric Power Company Incorporated (NYSE:AEP) (AEP) (Columbus, Ohio) failed to prove that customers should pay for the project. Passing the costs along to ratepayers on the $4.5 billion project was part of AEP's plans to fund the project and have it completed in a timely manner.

The judge also said that AEP failed to take competitive bids for the project, which is being developed by Invenergy LLC (Chicago, Illinois). The judge's recommendation is non-binding, but will be considered the Oklahoma Corporation Commission (Oklahoma City, Oklahoma), which has final say on the project's construction.

AEP plans to use 800 2.5-MW General Electric (NYSE:GE) wind turbine-generators for the facility. The overall project also includes a 350-mile transmission line and two 765-kilovolt substations. Construction on the windfarm was planned to begin in the fourth quarter of this year, taking a little more than two years to complete. For more information, see Industrial Info's project report. Construction on the transmission line and substations is set to kick off in 2019 for completion by the end of 2021. Quanta Services Incorporated (Houston, Texas) is the turnkey contractor for the transmission line and substations. For more information, see Industrial Info's project report on the transmission line, Tulsa North Generation Substation and Western Generation Substation.

AEP hopes to start the project this year in order to take advantage of the federal wind Production Tax Credit, which is phased down 20% each year through 2019. AEP said a delay in the project could risk up to $2.7 billion in credit that would not to be passed on to customers.

Earlier this month, AEP released its plans for "a clean energy future," in which the Wind Catcher Windfarm plays a large role. The plan calls for a 60% reduction in carbon dioxide levels from 2000 levels by 2030 and an 80% reduction from 2000 levels by 2050. Investment in renewable energy is a large part of the plan. The company plans to add 3,065 MW of solar generation and 5,295 MW of wind generation by 2030. AEP is already taking steps to reduce carbon dioxide levels. In a press release, the company said that 70% of its assets were coal-fired in 2005, versus 47% today. Renewable generation capacity has increased from 4% in 2005 to 13% today.

"If approved, Wind Catcher will be the largest contiguous wind farm in the U.S. and will deliver nearly 9 million megawatt-hours of low-cost wind energy annually to AEP customers in Oklahoma, Arkansas, Louisiana and Texas," said AEP. "Wind Catcher approval would accelerate how quickly AEP can add new wind generation to its portfolio."

As part of its future plan, AEP plans to dismantle and demolish a few coal-fired plants, including three in West Virginia. Among this is the 468-MW Kanawha River Power Station in Glasgow, West Virginia. The dismantlement is planned to kick off this summer, taking about a year to complete. The project has an estimated total investment value of $28 million. For more information, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.