Progress on AEP's giant North Central project boosts Covid-19-shaken US wind sector
Advancement of 900MW from utility's near-1.5GW planned expansion in Oklahoma turns eyes toward potential regulatory approvals to allow further capacity to be built
US electric utility American Electric Power (AEP) has approvals from regulators to move ahead and complete construction of at least 60% of its near-1.5GW North Central wind expansion for by the fourth quarter 2021.
AEP subsidiaries Public Service Company of Oklahoma (PSO) and Southwestern Electric Power (SWEPCo) now have regulatory approvals for cost-recovery to acquire 908MW of capacity from three wind projects that developer Invenergy is building to support the North Central initiative, the company said.
This includes 675MW in Oklahoma, where the projects will be located, 155MW in Arkansas and 78MW that will be allocated to SWEPCo wholesale customers. The Arkansas green light was important because it enabled capacity commitments to exceed the minimum 846MW threshold set by AEP for North Central to advance.
Greater economies of scale and federal tax credits will deliver about $3bn in savings for the utilities’ customers over 30 years, if the entire North Central capacity is built, according to AEP.
The three wind farms are 999MW Traverse, the nation’s second largest development at a single site, 287MW Maverick and 199MW Sundance. Sundance is eligible for the production tax credit at 100% value – $24/MWh for grid power over the initial decade of operation – and the others at 80%.
AEP’s decision to advance North Central is a win for GE Renewable Energy that will supply the order – using turbine models not yet made public – for the wind power expansion.
AEP will acquire part of or all the projects after they enter commercial operation depending on final capacity commitments in Arkansas, Louisiana and Texas – part of SWEPCo’s service territory. The full North Central investment would be about $2bn.
CEO Nick Atkins told analysts that all 1.49GW planned for North Central could very well get built if Louisiana and Texas approve SWEPCo acquiring 268MW and 309MW capacity, respectively.
SWEPCo in its filings in both Arkansas and Louisiana gives regulators there the option to allow the utility to “flex up” and acquire additional capacity if Texas were to reject its involvement in the project. There presently is no indication that would occur.
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