By a unanimous vote, the Texas Public Utility Commission (PUC) rejected what would have been the largest wind-energy project ever constructed in the United States.
In handing down its July 26 decision, the PUC said American Electric Power’s (AEP) $4.5 billion, four-state Wind Catcher project did not offer sufficient verifiable benefits to Texas ratepayers.
Although Wind Catcher had already received the necessary approvals from regulators in Arkansas and Louisiana, and a decision was pending in Oklahoma, AEP announced it was cancelling the project just a day after Texas’ PUC rejected the wind farm.
Angling for Federal Subsidies
Had Wind Catcher been approved, AEP subsidiary Southwestern Electric Power Co. (SWEPCO) would have acquired a 70 percent interest in the project. SWEPCO and its sister company, Public Service Company of Oklahoma (PSO), planned to complete construction in 2020 in order to take full advantage of the federal production tax credit (PTC), a subsidy for wind projects. Both companies would have reaped millions of dollars in tax credits.
Enormous in scale, Wind Catcher would have included a two gigawatt wind facility to be built by Invenergy on 300,000 acres in the Oklahoma Panhandle. From there, using a 360-mile, 765-kilovolt transmission line to be constructed, electricity was to be transported on to Tulsa, where it would have been connected to existing SWEPCO and PSO grids.
‘Questionable’ Benefit Claims
AEP claimed Wind Catcher would save SWEPCO and PSO customers more than $7 billion over 25 years. The Texas PUC cast doubt on those projections, with its commissioners saying the project would instead place an undue burden on Texas’ SWEPCO ratepayers. As a result, the PUC rejected an administrative judge’s Proposal for Decision (PFD) on the utility’s request for a certificate of convenience and necessity to participate in the project.
“I don’t believe I could approve a PFD, because I don’t believe it provides sufficient safeguards for the ratepayers,” said PUC Chair DeAnn Walker during a public hearing on the project. “The costs are known. The benefits are based on a lot of assumptions that are questionable.”
“They’re asking us for $4.5 billion in taxing authority against the people of Texarkana and Longview,” Commissioner Arthur D’Andrea said during PUC’s open discussion, referring to two cities in East Texas served by SWEPCO. “You have a burden to show the taxpayers and businesses in Texarkana and Longview really have something to gain from that. I don’t think that [SWEPCO has] met that burden.”
The PUC’s decision was smart because no wind farm delivers the performance it promises, says Jay Lehr, Ph.D., science director for The Heartland Institute, which publishes Environment & Climate News.
“The PUC made a wise decision, as there are no wind farms performing above 25 percent of their rated capacity,” said Lehr. “There is not one wind farm that does not require 100 percent working backup by traditional fossil fuel or nuclear plants ready to take over when the wind stops blowing.
“There are no wind farms that have not created health problems for those living within 1,500 feet of them,” Lehr said. “And considering the amount of steel, rare earths, and cement required to build them, wind projects are anything but green.”
Physicist John Droz, founder of the Alliance for Wise Energy Decisions, says Texas’ action was both welcome and rare.
“The Texas PUC is to be congratulated for carefully considering the economic impact of Wind Catcher on ratepayers,” said Droz. “Despite this being the statutory obligation of almost every state’s PUC, it is rare this is ever done.
“Instead, most commissions uncritically accept the specious claims of wind developers and rarely do an objective analysis of the real costs, which conservative estimates place at three or four times the cost of conventional electricity sources,” Droz said.
Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.