The recent recommendation by an Administrative Law Judge at the Oklahoma Corporation Commission against pre-approval of PSO’s massive Panhandle wind farm indicates the utility could present serious challenges in going before the full commission. In other words, PSO could be going against the wind.
As OK Energy Today reported earlier, Judge Mary Candler determined Public Service Company failed to meet the burden of proof required for pre-approval and the cost recovery of what was proposed to be the largest wind farm in the U.S.
She explained and defended her decision in 24 of the 136-page report, noting, “The size and scope of the Project brings unique risks.”
The total cost will be $4.5 billion and PSO’s 30% share of the project will be approximately $1.36 billion.
“If approved, PSO’s proposal will increase PSO’s rate base by 68.2%,” she explained.
“PSO’s evidence in this case was that the Project was not proposed or needed to meet energy needs or for system reliability,” added Judge Candler. “It is not needed to supply capacity for meeting future demands, renewable energy goals or any future regulations of carbon emissions.”
She wrote that if the state law requires that there be a need for capacity or meet a need as it relates to renewable energy requirements or other regulatory requirements, “then PSO has not proven that such a need exists.”
“The goal of PSO’s Project is almost entirely to lower costs to ratepayers, not to keep the lights on. The Project is therefore driven by an ‘economic’ need, not a ‘reliability’ need,” added the judge.
The decision came after numerous witnesses testified for and against the project.
Attorney General Mike Hunter’s office opposed the project’s pre-approval. One of his witnesses, Daniel Bauerkemper opposed the massive transmission line that PSO has proposed to carry electricity across northern Oklahoma to a substation north of Tulsa. He warned eminent domain will likely to be used in building the 380-mile long Gen-Tie line and said it would also run across a region “with a high rate of tornado activity.”
Another witness for the attorney general suggested the Gen-Tie transmission line “may cost more than estimated and that the additional cost may be passed on to the customers.”
A third witness presented by the attorney general maintained PSO had failed to present a compelling argument for the commission to grant the pre-approval. The witness also pointed out PSO chose not to engage in a competitive bidding process and that the company was secretive about its involvement in the project. PSO did not reveal it was part of the project until five days before the filing of the application .
Others had reservations about the project including one witness who expressed concerns about the land use the wind generation facilities require.
The Windfall Coalition questioned PSO’s natural gas price forecasts calling them “unrealistically high.” Thomas Petrie, speaking as a Coalition expert said PSO’s “forecasts have consistently overestimated future natural gas prices.”
The Oklahoma Municipal Power Authority opposed the Wind Catcher project, also noting “PSO’s analysis to support the alleged economies of the project rely on flawed speculative analysis on the future price of natural gas resulting in unrealistically high estimates.”
The OMPA took note that PSO did not go through the planning process of the Southwest Power Pool and thus circumvented federal competitive bidding requirements. The authority even suggested that eventually once the project’s transmission line joins the SPP, the high costs will result in a “substantial increase” in charges to all retail consumers in Oklahoma.
Even the Golden Spread Electric Cooperative of the Texas Panhandle questioned the project. So did Novus Windpower based in Guymon, Oklahoma which argued PSO was not entitled to pre-approval relief under the rules of the Corporation Commission.
“Novus urges that the Wind Catcher Project, as proposed, would likely have a negative impact on the development of one of Oklahoma’s primary resources,” stated the report. Novus argued that should the Gen-Tie transmission line be approved and built, it would leave “all other projects in the area stranded unless and until another completely separate, large-scale, long-distance high voltage transmission line is built against the state.”
