Wind Catcher Plans to Run by 2020, Critics Notwithstanding

Unique Wind Farm and Power Line Connection Promise to Boost Transmission and Save Customers Money, but Critics Raise Objections.

Wind Catcher at a glance

The proposed Wind Catcher Energy Connection would include the largest wind farm in the US and an innovative dedicated power line connection.

  • Purpose: To boost wind power generation and transmission to meet growing demand
  • Scope of project: Includes construction of 2,000 MW wind farm in the Oklahoma panhandle and a 765-kV 350-mile dedicated generation tie-line that would deliver energy to the existing power grid near Tulsa. From there the energy would travel to customers in Oklahoma, Arkansas, Louisiana and Texas.
  • Project Cost: $4.5 billion
  • Project Timeline: Wind farm is currently under construction. Stakeholders hope to complete wind farm and power line and have the project operational by 2020.
  • Status: Approvals have been granted by Arkansas and Louisiana; approvals still pending from Oklahoma, Texas and the Federal Energy Regulatory Commission.

Main players include:

The eyes of the wind industry are watching to see what happens over the next month with the proposed Wind Catcher Energy Connection, which would include the largest wind farm in the United States.

The $4.5 billion project would include a 2,000 MW wind farm that Invenergy is building in the Oklahoma panhandle. American Electric Power (AEP) would acquire the wind farm and build a 765-kV 350-mile dedicated generation tie-line that would deliver energy to the existing power grid near Tulsa. From there the energy would travel to customers in Oklahoma, Arkansas, Louisiana and Texas.

Richard Heap

“This is a high-profile project, and one that’s gotten a lot of attention,” said Richard Heap, editor-in-chief of A Word About Wind. “A lot of people want to see it happen, and think it would be a good thing for the industry.”

But not everyone wants to see it happen, at least not as proposed. Those expressing opposition have included Novus Windpower, which is developing projects in the same area; Oklahoma-based Oneta Power, which operates a natural gas power generating facility; and the Windfall Coalition, which wants to see wind power taxed no differently from other power sources in Oklahoma.

Wind Catcher Connection Map

In a statement issued June 21, Oklahoma Attorney General Mike Hunter said “from the beginning, our position has been that Wind Catcher does not meet the requirements for preapproval and cost recovery and should be denied by the commission (Oklahoma Corporation).”

Hunter also came to the defense of the city of Bixby, Okla., and area landowners who oppose a newly planned route for the Wind Catcher’s dedicated power line. “This is a clear burden for the Bixby community and stands to hinder economic development in our state,” Hunter said. “I want to ensure the city’s interests are properly addressed.”

“Wind Catcher has received approvals from Arkansas and Louisiana. Besides Oklahoma, approvals are pending from Texas and the Federal Energy Regulatory Commission.”

Wind Catcher Project Timeline

Wind Catcher would be owned by Public Service Company of Oklahoma (PSO) and Southwestern Electric Power Co. (SWEPCO), both of which are part of AEP.

Raja Sundararajan

AEP says the Wind Catcher Energy Connection will save customers more than $7 billion over 25 years.

“We feel that we have an obligation to provide customers with the best options so that they are protected from volatility of fuel prices, and this is one way to achieve it,” said Raja Sundararajan, AEP’s vice president of regulatory services.

AEP hopes to obtain all the approvals it needs by the end of July, and to have Wind Catcher up and running by the end of 2020.

More Transmission: Needed but Complicated

Heap, who is based in London, says more wind energy transmission lines are needed in the United States to keep up with growing demand. However, he said U.S. power developers and related entities face significant challenges when they try to make that happen.

“In any conversation I have with people in the industry in the states, when I ask them what they see as the big challenges in the market, transmission is the one that comes up 99 times out of 100,” Heap said. “They have to go through so many different areas and cross so many people’s lands and get so many different bits of approval. That can be tough for developers to do.”

And there are other challenges. “We need more of some types of infrastructure,” Heap said. “It’s also about how you use data and predictive analytics to know how much, or what the weather pattern is going to be in a certain area, how much power a wind farm is going to produce and send to the grid, and how you balance that with all the other projects doing that.”

Sundararajan said the typical power generation resource is connected to the transmission network by a small line. By contrast, the Wind Catcher wind farm in a remote area of the Oklahoma panhandle needs “a long extension cord to connect the wind resource to the load pocket in the AEP zone,” he said.

AEP has sized the proposed dedicated power line to “exactly match the wind resources we need,” Sundararajan said. “That is the innovative aspect of it. Nobody has done a 2,000 MW wind farm and a 350-mile gen-tie line. That is what makes it unique.”

Tax policy also plays a role in this complex project. One of the reasons AEP wants to get Wind Catcher in gear by 2020 is to take full advantage of federal renewable electricity production tax credits.

“Projects that started construction in 2016 and go in service by 2020 get 100 percent of production tax credits,” Sundararajan said. “Then you have a sliding scale.”

Sundararajan said the most obvious reason for Wind Catcher is the basic economics underlying the project, which will benefit customers. Besides fuel savings, the tax credits will be figured into customer bills, he said.

Down to the Wire in Oklahoma              

The Wind Catcher proposal has made progress in Oklahoma but still has hurdles to clear. It was announced on April 24 that PSO, Oklahoma Industrial Energy Consumers (OIEC) and Walmart (a large user of electricity) had reached a settlement agreement involving the project.

PSO said the terms of the agreement “further ensure that customers will benefit from Wind Catcher by imposing additional limits on construction costs, improving performance guarantees, and most notably, guaranteeing that customers will save money over at least the first ten years.”

PSO said the agreement provided “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 guaranteeing to make customers whole in the unlikely event that the project does not yield customer savings.”

PSO, OIEC and Walmart requested that the Oklahoma Corporation Commission approve Wind Catcher under the terms of the settlement agreement.

In May Oklahoma Attorney General Hunter and Brandy Heath, the director of the Oklahoma Corporation Commission’s Public Utility Division, said in a regulatory filing that they still opposed PSO’s request to obtain preapproval to recover the cost of building the Wind Catcher project.

But at the same time, Hunter and Heath issued a list of stipulations they would agree to, and asked the commission to require those as part of any cost preapproval deal. The stipulations include a cost cap on investment in the project, and that “costs above the cost cap will not be recoverable through retail rates.”

Sundararajan said AEP “stands by the need for the project and has provided significant guarantees and assurances to mitigate concerns by various parties. This is a complicated project. It’s a unique project. The economics of this project are difficult to understand. It takes a lot of modeling to figure out the true economics of this, and that has taken some time.”

More Battles to Come?

Regardless of Wind Catcher’s fate in Oklahoma, Heap said the wind industry must be alert to other challenges that could surface in the United States.

“Just because we’re in a good situation now, that doesn’t mean there won’t be future battles,” Heap said. “The battle for hearts and minds has been won. We haven’t seen anything particularly negative come out of the Trump administration in terms of the wind industry, which is good. But if there’s one thing you can say about the Trump administration, it’s that it is unpredictable.”

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