July 27, 2018 Read More →

Texas regulators reject AEP’s Wind Catcher project

Bloomberg:

Texas dealt a potential death blow to what would be the largest-ever U.S. wind farm: American Electric Power Co.’s $4.5 billion Wind Catcher project.

The Texas Public Utility Commission on Thursday unanimously rejected the project as proposed, saying it doesn’t offer enough benefits for ratepayers as currently structured. American Electric said it was evaluating its options.

“Looks like curtains to me,” said Paul Patterson, an analyst at Glenrock Associates LLC. “Almost everyone was opposed to this. Barring any big concessions from AEP, it looks to me like it’s dead.”

The denial could spell the end of American Electric’s ambition to make one of the largest renewable energy purchases ever by a U.S. utility company. The rejection comes as utility owners including Xcel Energy Inc. and Warren Buffett’s Berkshire Hathaway Inc. have been seeking state approvals to charge customers for renewable energy projects that have become more competitive with electricity produced by fossil-fuels.

“We’re extremely disappointed in today’s Public Utility Commission of Texas decision rejecting our Wind Catcher proposal,” Melissa McHenry, an American Electric spokeswoman, said in an email.

The project that Invenergy LLC is developing in Oklahoma needs approvals from both Texas and Oklahoma to move forward, American Electric’s Chief Executive Officer Nick Akins said Wednesday during an earnings call with analysts.

American Electric’s proposal tapped a financial model that utilities have long used to build nuclear, coal- and natural gas-fired plants: by tacking costs — plus a profit — onto customers’ bills. The company asked regulators in four states for permission to use the strategy for a sprawling project almost twice the size of Singapore.

“The costs are known,” DeAnn Walker, chairman of the Texas commission, said Thursday at a hearing. “But the benefits are based on a lot of assumptions that are questionable.”

More: Largest U.S. wind farm dealt potentially fatal blow in Texas

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