American Electric Power cancels US$4.5 billion Wind Catcher project

American Electric Power (AEP) has announced that it is canceling the Wind Catcher project, following its rejection by the Texas Public Utility Commission. The US$4.5 billion proposal involved the acquisition of a 2,000 MW wind farm, currently being constructed by Invenergy, and a 563 km, 765 kV transmission line.

Invenergy commenced construction of the wind farm in 2016, selecting GE to provide 800 2.5 MW turbines. It is located in Cimarron and Texas counties, Oklahoma, in the state's Panhandle region. Operations were expected to begin in mid-2020, at which point Wind Catcher would be the largest single-site wind farm in the USA. 

Neither Invenergy nor GE have yet commented on the cancellation, so the future of the wind farm is uncertain.

AEP planned to acquire the wind farm and transmission line upon completion through subsidiaries Southwestern Electric Power Company​ (SWEPCO) and Public Service Company of Oklahoma (PSO), to acquire 70% and 30% stakes, respectively. The utility filed applications with the Public Service Commissions of Arkansas, Louisiana and Texas, the Oklahoma Corporation Commission and the Federal Energy Regulatory Commission in July 2017.

The planned transmission line would transport the energy generated by the wind farm to Tulsa, Oklahoma, where it would connect to AEP's existing grid and be transported to AEP customers in Oklahoma, Arkansas, Louisiana and Texas. It was thought that the project would supply around 1.1 million consumers.

As reported on this platform, the project was approved by the Arkansas Public Service Commission, Louisiana Public Service Commission and Federal Energy Regulatory Commission earlier this year. A decision was pending at the Oklahoma Corporation Commission.

The Texas commission's rejection was due to the lack of certainty that the projected benefits to ratepayers would offset the guaranteed extra costs. State officials in Oklahoma were also questioning the financial benefits, as well as identifying potential legal problems, due to the project not having been competitively bid and construction having started before PSO had filed its application.

AEP's rationale for cancelling the project is that the process of re-submitting an adjusted proposal to the regulatory bodies would delay completion, meaning that the project would lose its eligibility for 100% of the federal production tax credit.