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AEP utility, Ark. parties reach settlement on Wind Catcher project

American Electric Power Co. Inc. utility subsidiary Southwestern Electric Power Co. and other parties reached a settlement with Arkansas regulatory staff that, if approved by the state Public Service Commission, would advance its multibillion-dollar Wind Catcher Wind Farm and electric transmission project.

SWEPCO announced Feb. 20 it reached a settlement agreement with Walmart Inc., Sam's West Inc., the PSC's general staff and Arkansas Attorney General Leslie Rutledge, and filed a joint motion to the commission. As part of the agreement, SWEPCO agreed to a cap on construction costs; that it will qualify for 100% of the production tax credits; and that it will meet a minimum net average capacity factor, among other provisions.

"We are extremely pleased with this settlement agreement because it recognizes the tremendous opportunity the Wind Catcher project provides for clean, low-cost energy and long-term savings for SWEPCO customers," SWEPCO President and COO Venita McCellon-Allen said in a statement. "Our customers are looking to us to provide clean, reliable and cost-effective power. Wind Catcher will help companies, universities, cities and other customers meet their sustainability and renewable energy goals."

Walmart, which is headquartered in Arkansas, noted in the statement that it has a corporate goal of receiving all of its energy supply from renewable resources.

The $4.5 billion Wind Catcher project includes 2,000 MW of generating capacity in western Oklahoma and a 360-mile transmission line to the Tulsa, Okla., area. Gaining approval in Arkansas would be important to the project, because SWEPCO customers would bear 70% of the overall cost. The settlement agreement imposes a cost cap of $3.29 billion, equal to 107.5% of estimated cost. (Arkansas PSC Docket No. 17-038-U)

SWEPCO said that the project will save its customers more than $4 billion over its 25-year life span, starting in 2021. Wind Catcher is expected to come online in 2020. SWEPCO said it expects some components such as turbine blades, towers and generator frames to be manufactured in Arkansas, Louisiana and Texas.

AEP has run into trouble in Oklahoma, where a state administrative law judge ruled Feb. 13 that subsidiary Public Service Co. of Oklahoma that it did not prove the need for the wind farm and failed to consider other alternatives to justify cost recovery for the project. Regulatory approval is needed in Arkansas, Louisiana, Oklahoma and Texas and from the Federal Energy Regulatory Commission.