The $2.47 billion renewable energy plan proposed by Public Service Company didn’t go through the regulatory process as smoothly as some expected. It ran into opposition.
However, an apparent settlement stipulation has been reached by some of the groups that opposed the utility’s request for cost recovery approval from the Corporation Commission.
A Thursday posting by the commission of a special meeting at 8:30 a.m. on April 11 referred to a possible settlement. But no vote by commissioners is planned during the meeting.
The plan proposed last year by PSO included its purchase of three solar facilities and three wind farms located in the Texas Panhandle and Kansas. It did not include any new construction in Oklahoma. The projects would provide 995.5 MW of new renewable resource capacity for PSO.
But it was met by dozens of consumers who filed objections with the Corporation Commission to the proposal.
Attorney General Gentner Drummond’s office also filed documents and expressed concerns about the costly project. His office provided a list of concerns including whether the cost of the proposed projects is the lowest reasonable cost for capacity. Another was whether PSO had appropriately considered alternative to the proposed projects. He wanted to know about the economic risks, the accuracy of PSO’s Customer Impact Study, and whether approval is in the public interest.
Two statewide organizations, the Oklahoma Petroleum Alliance and the Oklahoma Industrial Energy Consumers also came out against the project as proposed by PSO.
Both filed petitions with the Oklahoma Corporation Commission and opposed PSO’s request for pre-approved costs of the large project. Under the plan, PSO’s purchase of the six renewable energy projects from Invenergy LLC was contingent upon the Corporation Commission determined that the projects would be used and useful for customers and eligible for cost recovery.
Scott Norwood of Norwood Energy Consulting, LLC based in Austin, Texas testified for OIEC against the project, stating he was concerned about the “extraordinarily high cost and uncertain customer benefits of the proposed Renewable Resources.”
He stated there were serious flaws in PSO’s project, finding the utility failed to evaluate or solicit proposals for available reasonable alternatives to the proposed renewable resources.
Norwood also urged the Commission to deny PSO’s request for approval, require the utility to update its analysis to reflect current market conditions and to evaluate the conversion of one of its existing power plant units to burn natural gas. He also said the regulators should require PSO to expand the range of resources in any future efforts for generating capacity.
The Petroleum Alliance expressed concern about the rates and charges proposed for PSO’s services as a result of the renewable energy projects.
“Of particular importance are issues related to the sources of PSO’s electric generation and the reliability of those sources, PSO’s fuel procurement and its use fuel forecasting process and modeling,” stated the Alliance in a filing with the Corporation Commission.
It also expressed concerns about PSO’s increased reliable on intermittent sources of electric generation, such as the wind and solar farms that are the subject of the utility’s application.
“Finally, the Petroleum Alliance is concerned with the negative impact the addition of the proposed intermittent resources will have on both the State of Oklahoma and on the Oklahoma natural gas industry if they displace natural gas production as an electric generation fuel source.”
The Alliance also took issue with PSO’s claims that the projects would create economic benefits for customers and communities served in Oklahoma, pointing out none of the proposed projects are located in the state.
Another OIEC witness, Mark Garrett testified law provides only three scenarios under which a utility is allowed to seek pre-approval for generation capacity and energy additions and PSO’s project fits none of them.
PSO’s request was to be considered at the Tuesday meeting of the Corporation Commission. The meeting was delayed twice as attorneys for OIEC, Petroleum Alliance and PSO huddled privately to discuss a settlement.
Following the last delay, attorneys announced a settlement of their differences had been reached but details were not provided to the commissioners. Instead, an attorney said the settlement agreement would be filed.
Thomas Schroedter Executive Director and General Counsel of the OIEC, told commissioners his organization’s motion to discuss the PSO request was withdrawn. An attorney for the Petroleum Alliance stated the organization was “not agreeing with the settlement but not opposing it.”
