Regulated Renewables

AEP took major steps in 2017 to expand its regulated renewable portfolio throughout its service territory. The largest project is the proposed Wind Catcher Energy Connection, which includes the acquisition of a 2,000 megawatt (MW) wind farm in the Oklahoma Panhandle and construction of a dedicated generation tie line to the Tulsa area, where the existing electrical grid will deliver “congestion free” wind energy to customers.

The Wind Catcher facility, being developed by Invenergy, will be the largest contiguous wind farm in America. If approved by regulators, the $4.5 billion project will deliver nearly 9 million megawatt-hours of new, low-cost wind energy per year and produce significant savings to more than 1 million customers in Oklahoma, Arkansas, Louisiana and Texas. Wind Catcher is expected to save customers more than $6 billion over the 25-year life of the wind farm. The Public Service Company of Oklahoma (PSO) will own 30 percent of the project, and Southwestern Electric Power Company (SWEPCO) will own 70 percent.

PSO and SWEPCO held 17 open houses in communities along the initial power line study route in late 2017 and early 2018. Landowners, community members and elected officials were invited to in-person conversations with planners, engineers, routing experts and right-of-way and construction representatives. Over 1,500 people attended the open house events. Local field representatives continue to respond daily to inquiries from the public and attend local community events to provide more information about the many benefits of the project.

Wind energy is a great economic driver for this region of the country since it can coexist with agricultural production and provide farmers and ranchers with additional income for the use of their land. In some cases, this arrangement has helped customers save their family farms. Additional property tax revenues from new investments will provide rural communities with funding for local needs.

There are also clear environmental benefits. The wind farm would not produce carbon emissions and would not require water to generate electricity, which is important in a region that is often prone to droughts.

The project is subject to review by utility regulators in Oklahoma, Arkansas, Louisiana and Texas, as well as the Federal Energy Regulatory Commission. Regulatory reviews began in mid-2017 after PSO and SWEPCO filed applications with their state commissions. Hearings continue in the various jurisdictions and decisions are expected this spring. In February 2018, SWEPCO announced a settlement agreement with stakeholders in Arkansas, including the Arkansas Public Service Commission (APSC) staff, State Attorney General, Walmart Stores, Inc. and Sam’s West, Inc. The agreement includes a number of project performance guarantees. A final decision by the APSC is pending.

In March 2018, PSO announced a settlement with Walmart that also includes performance guarantees. With the guarantees, SWEPCO and PSO are demonstrating their commitment and ability to deliver customer benefits from Wind Catcher.

In April 2018, SWEPCO announced a settlement agreement in the Louisiana Public Service Commission’s (LPSC) review of the project. The agreement includes SWEPCO, the LPSC General Staff, Walmart and Sam’s West, Inc. It includes several guarantees, including a cap on construction costs and qualification for 100 percent of the federal Production Tax Credits.

In April 2018, PSO, Oklahoma Industrial Energy Consumers (OIEC) and Walmart reached a settlement agreement on the project. Together, PSO, OIEC and Walmart are asking the Oklahoma Corporation Commission to approve the project under the terms of the settlement agreement, which imposes limits on construction costs, improves performance guarantees and guarantees customer savings over at the least the first ten years, even if natural gas prices stay at historically low levels and if federal tax changes occur that affect the economics of the project. Reviews are still pending in Texas and at the FERC as well.

In January 2018, Appalachian Power Company (APCo) began receiving 120 MW of new wind generation from a universal wind farm in Indiana, serving customers in Virginia and West Virginia. Through a 20-year purchased power agreement, the energy from the Bluff Point Wind Energy Center in Indiana increased APCo’s total wind generation to 495 MW and is consistent with its forward-looking resource plans to serve customers.

In 2017, APCo laid the groundwork for its first photovoltaic solar generation project to be built in Rustburg, Virginia. The 15 MW Depot Solar Center will be built and operated by Coronal Energy. APCo signed a 20-year purchased power agreement to receive the energy from the solar array to serve its customers. The Depot Solar Center is expected to be operational by December 2020 and will be interconnected directly to APCo’s system at its Rustburg substation.

This proposed project will support economic growth in that region from companies that want to receive energy from renewable energy resources. Customers will benefit through cost savings and reduced risk and exposure to the volatility in the PJM wholesale power market.

Today, APCo produces 1,900 gigawatt-hours of energy annually from wind- and hydro-power – enough power to supply 150,000 homes. APCO continues to evaluate opportunities to increase the amount of renewable energy it provides to serve its customers.

In 2017, AEP Ohio sought proposals for 400 MW of universal-scale solar energy generation resources and 250 MW of wind generation resources in the state. These proposals would help fulfill a 2016 agreement approved by the Public Utilities Commission of Ohio (PUCO), enabling AEP Ohio to pursue development of more solar and wind energy in the state, including 400 MW of solar and 500 MW of wind generation. All projects must be approved by the PUCO.

Customers in Ohio currently receive renewable generation service from the Wyandot Solar Farm near Upper Sandusky, Ohio, Fowler Ridge in Benton County, Indiana, and Timber Road in Paulding County, Ohio. Wyandot produces 10 MW of energy, and Fowler Ridge and Timber Road each produce about 100 MW.

These projects are reflective of customer requests for clean energy, as well as the economic development potential they provide for our communities. These examples also reflect some of the many transitions our operating companies are making toward a sustainable clean energy future.