American Electric Power Co. Inc., the staff of the Oklahoma Corporation Commission and other stakeholders have reached an agreement on the terms under which the company's subsidiary Public Service Co. of Oklahoma can recover from customers the cost of purchasing a 45.5% ownership stake in three wind projects in the Sooner State.
Ohio-based AEP intends to purchase three north-central Oklahoma wind farms — the 999-MW Traverse Wind Energy Center, the 288-MW Maverick Wind Project and the 199-MW Sundance Wind Project — through two of its subsidiaries, the Public Service Co. of Oklahoma, also known as PSO, and Southwestern Electric Power Co.
The settlement agreement, filed Dec. 10 with the state commission and subject to that agency's approval, only applies to the PSO's proposed 675-MW stake in the projects. It does not apply to the remaining 54.5% ownership interest in the facilities that Southwestern Electric is expected to hold, pending separate approvals.
"This settlement agreement puts PSO a step closer to adding more low-cost Oklahoma wind energy to its portfolio," said PSO COO and President Peggy Simmons.
The filed agreement includes a total capital cost cap of approximately $908.28 million.
AEP announced its desire to purchase the Invenergy LLC-developed projects in July. The Sundance wind project is expected to start generating test power in 2020, with the Traverse and Maverick wind facilities following suit in 2021. None of the projects will enter commercial operations until the proposed acquisition of each facility is completed.
According to an AEP press release, the purchase may save PSO customers over $1 billion net of cost over the course of the wind farms' lifespans. During the company's second-quarter earnings call, AEP Chairman, President and CEO Nicholas Akins said "the investment is expected to both lower customer rates and provide a long-term earnings opportunity for shareholders," pointing to about $3 billion in anticipated customer benefits over the 30-year life of the wind projects.