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American Electric Power Co.’s Wind Catcher project received a blow from an Oklahoma state judge who said the project failed to prove sufficient need. More specifically, administrative law judge Mary Candler said American Electric Power Co. had failed to convince the court that customers should pay for the US$4.5-billion wind farm.
The judge added that the company had also failed at ensuring there were competitive bids for the project, noting that “An excuse of ‘not enough time’ for competitive bidding is not sufficient.” The judge went further, saying AEP’s analysis of cost savings for customers “used unreasonable data” and a “flawed planning process.”
The company had estimated that Oklahoma customers would save US$7 billion over 25 years with Wind Catcher. It also warned that a delay in the project would increase the costs to be passed on to customers by US$2.7 billion. The reason it forewent the competitive bidding process was to beat the expiration date for a federal tax credit for wind power projects in 2020.
The Wind Catcher farm will have a capacity of 2,000MW and will supply power to customers in Oklahoma, Arkansas, Louisiana, and Texas. According to the project website, Wind Catcher should bring some US$300 million in property taxes into local community coffers. It is supposed to be completed in 2020, but setbacks like Judge Candler’s ruling could delay it.
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In response to the ruling, AEP said the judge had ignored evidence supplied by the company, which included a guarantee of customer benefits. The company also added it hoped the Oklahoma Corporation Commission will decide in favor of it.
Oklahoma has become the second-largest wind-producing state in the U.S., but due to a state budget crisis coupled with the oil and gas industry pushing back against wind, it has scrapped some wind energy tax incentives, Christian Science Monitor’s Christa Case Bryant wrote recently. The state pays tens of millions of dollars in wind power industry subsidies and may well have begun to pant under the weight of the bill, which grows as the industry grows.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.