Community , Legal

 Judge does not recommend utility rate hike to subsidize western wind farm

OKLAHOMA CITY — An administrative judge with the Oklahoma Corporation Commission is not recommending pre-approval of a utility rate increase that would subsidize a western Oklahoma wind farm.

In a report published Monday, Judge Mary Candler wrote that the Public Service Company of Oklahoma relied on unreasonable data and flawed planning process when making its case for a rate hike that would help cover the costs associated with building Wind Catcher Energy Connection.

Pitched as the second largest wind energy project in the world, Wind Catcher Energy Connection is a joint effort among Chicago-based Invenergy, Southwestern Electric Power Company and PSO-Oklahoma.

The project’s transmission line would run 360 miles from an 800-turbine farm near Guymon to a Tulsa-area substation and then on to additional substations in Louisiana, Arkansas and eastern Texas.

The $4.5 billion project is slated to generate 2,000 megawatts of energy annually when it comes online in late 2020. PSO officials have indicated that they would prefer the line to take the most direct route from the Panhandle to the Tulsa area, which would mean passing through far southern Osage County.

The projected path would have the line enter Osage County north of Blackburn, head southwest between Hominy and the Big Bend area, then continue straight west just north of Osage, Prue and Walnut Creek State Park before eventually running parallel to West 88th Street North and reaching a substation in Sperry. 

PSO Oklahoma’s share of the construction bill was slated at $1.57 billion, of which $78 million would come from the proposed rate hike starting in 2021. Candler questioned that amount in her ruling, noting that PSO-Oklahoma’s analysis relied on projected natural gas prices and carbon data that put the project in the best possible light.

In order to qualify for the Department of Energy’s Renewal Electricity Production Tax Credit, construction has to be underway before Dec. 31, 2019, with a higher per-kilowatt hour credit available if building starts in 2018.

To get the project online quickly enough, PSO-Oklahoma skipped part of the competitive bidding process for the transmission line. In her report, Candler said the time crunch was insufficient reason to justify increasing customer rates, as the $78 million figure did not take into consideration the possibility that the project might not qualify for the full tax credit.

Additionally, Candler noted, cost recovery pre-approval has to be requested before construction starts, but building efforts are already underway in the Panhandle.

Candler’s report is not binding, but will be taken into consideration by the Oklahoma Corporation Commission later this spring.