American Electric Power cancels Wind Catcher project

American Electric Power (AEP) has decided not to move forward with a 2,000MW wind farm after Texas regulators declined to approve the project.

The Texas Public Utilities Commission (PUC) voted unanimously yesterday to reject the $4.5bn Wind Catcher proposal out of concerns that ratepayers would gain little from it.

"I do not believe it provides sufficient safeguards for the ratepayers," PUC chair DeAnn Walker said. "The costs are known but the benefits are based on a lot of assumptions that are questionable."

The ruling dealt the final blow to a project that was designed to deliver power from a 2,000MW wind farm in Oklahoma to customers in that state as well as Arkansas, Louisiana and Texas. The project included a 350-mile transmission line through the Oklahoma panhandle. Once completed, it would have been the largest in the US.

"We are disappointed that we will not be able to move forward with Wind Catcher, which was a great opportunity to provide more clean energy, lower electricity costs and a more diverse energy resource mix for our customers," AEP chief executive Nicholas Akins said.

The ability to quality for a key federal tax incentive was factor in the company's decision.

"Timely approvals were required from all jurisdictions so we could complete the project by the end of 2020 and be eligible for 100pc of the federal production tax credit (PTC)," Akins said.

The PTC offers wind projects that being construction this year about 1.4¢/kWh. It will decline by 20pc in 2019 to about 0.9¢/kWh and then expire.

Regulators in Arkansas and Louisiana approved the project earlier this year, but AEP ran into resistance from officials in other states, including from Oklahoma attorney general Mike Hunter (R), who raised similar concerns about costs to ratepayers.

Hunter said Texas regulators made a "sound and sensible" decision.

"Our position was never critical of the company or the benefits of wind or other forms of renewable energy. It was about protecting the ratepayers and ensuring they did not shoulder the risks of this $4.5bn project," he said.