Support for Public Service Company of Oklahoma's (PSO) Wind Catcher Energy Connection project continues to gain momentum, as four more parties have signed on to proposed settlement agreements in Oklahoma.
The Oklahoma Municipal Power Authority (OMPA), Tri-County Electric Cooperative (Tri-County), South Central MCN, a subsidiary of GridLiance Holdco, LP (GridLiance), and Oneta Power L.L.C. (Oneta) have now joined with Oklahoma Industrial Energy Consumers (OIEC) and Walmart in reaching settlement agreements with PSO on Wind Catcher. These parties are requesting the Oklahoma Corporation Commission (Commission) approve the terms of the agreements - terms which collectively result in significant customer savings guarantees and increased use of natural gas power generated here in Oklahoma.
PSO and Walmart first reached an agreement for approval of the project in March. In late April, OIEC, a membership organization that comprises some of PSO's largest users of electricity, joined Walmart in reaching agreement on terms for the project's approval.
Among other things, the most recent agreements:
1) Include a new purchase power agreement with Oneta for 300 megawatts of low-cost natural gas energy and capacity beginning in 2022, as well as a commitment to issue a Request for Proposals for more capacity.
2) Provide protections that guarantee PSO will not provide retail electric service in Tri-County's certified service territory for 25 years after the project begins commercial operation.
3) Provide GridLiance the option to construct, own and operate any future Panhandle Interconnecting Facilities to the extent that PSO would otherwise have the right to construct, own, and operate those interconnecting facilities pursuant to its or SPP's Open Access Transmission Tariff.
The new terms are in addition to the existing agreement that ensures customers will benefit from Wind Catcher by imposing additional limits on project construction costs, improving performance guarantees, and most notably, guaranteeing that customers will save money over at least the first ten years, providing certainty for customers even if natural gas prices stay at historically low levels and there are changes to federal tax law that affect the economics of the project. In effect, the Company is committing to make customers whole in the unlikely event that the project does not yield customer savings. Wind Catcher is expected to save PSO customers around $2 billion net of its costs over the 25 years the project is in service.
PSO President and Chief Operating Officer, Stuart Solomon, says the settlement agreements further demonstrate that Wind Catcher is good for customers.
"The agreements guarantee customers will save money and allow us to move forward with our plan to increase use of Oklahoma based renewable energy and natural gas generation to provide affordable, reliable service to our customers," said Solomon. "We're pleased to have OMPA, Tri-County, GridLiance and Oneta join us in our efforts to significantly lower costs for our customers and boost communities and schools throughout our state."
About Wind Catcher
The new wind energy will complement PSO's existing power resources, which include natural gas, wind, power purchases, and coal.
When it comes online in late 2020, Wind Catcher will be the lowest cost energy on PSO's system. Customers will see savings primarily through a reduction in the fuel portion of their bills. With Wind Catcher, PSO customers will receive approximately 40% of their energy from Oklahoma wind resources.
The $4.5 billion Wind Catcher project includes acquisition of a 2,000-megawatt wind farm under construction in the Oklahoma Panhandle near Guymon and a dedicated generation tie line to the Tulsa area, where the energy will be delivered to customers. The project is a partnership between PSO and sister company, SWEPCO. PSO's share of the project investment is $1.36 billion.
Wind Catcher will add thousands of jobs to the Oklahoma economy and provide $60 million in state and local taxes during construction. The project will provide an estimated $300 million in property taxes and 80-90 permanent jobs while in service.
PSO, a unit of American Electric Power (NYSE: AEP), is an electric utility company serving over 550,000 customer accounts in eastern and southwestern Oklahoma. Based in Tulsa, PSO has approximately 3,800 megawatts of generating capacity, and is a significant provider of wind energy in the state. News releases and other information about PSO can be found at www.PSOklahoma.com.
