Oklahoma utility buys 600MW of wind power to cut cost of electricity

Climate Progress

Oklahomans will soon be paying less for their electricity because their utility looked at the market and decided that wind power would be the most cost-effective option.

On Thursday, the 100-year-old Public Service Company of Oklahoma (PSO) — a division of American Electric Power (AEP) — signed an agreement to buy 600 megawatts of power from wind farms being developed in the northwestern part of the state. Currently there is just one large-scale wind farm in the Panhandle and in almost two years,there will be three more.

“The Panhandle of Oklahoma truly is one of the mother lodes of wind in this country,” said Clean Line Energy Partners President Michael Skelly.

The initial plan was just to buy one 200 MW project, but PSO tacked on another 400 MW “after seeing extraordinary pricing opportunities that will lower utility costs by an estimated $53 million in the first year and even more thereafter,” according to Tulsa World.

The Renewable Energy Purchase Agreement means that on January 1, 2016, 600 megawatts of wind energy will be available, enough to power 200,000 average American homes. This is pending the approval of the Oklahoma Corporation Commission.

The agreement is actually three separate agreements, the first being with Apex Clean Energy for 200 megawatts of power to be produced by the Balko Wind farm in Beaver County. Balko projects this project will inject $333 million into the local economy, along with nearly 200 jobs during construction and almost 50 once the farm is operating.

The second agreement is with NextEra Energy Resources’ Seiling wind project for 200 megawatts, and the third is in Texas County, with TradeWind Energy for 200 megawatts planned on its Goodwell wind farm.

The wind industry employs 4,000-5,000 people in Oklahoma.

Oklahoma has a voluntary renewable energy goal instead of a mandatory standard. In 2011, the Oklahoma Wind Energy Development Act went into effect, which ensures wind operators have liability insurance, as well as dealing with landowner royalty payments and the retirement of old turbines. Yet it doesn’t deal with permitting or siting issues, and recently, local governments have been filling the gaps as some complain about new turbines.

All of this power has to be transported somehow, and transmission projects are underway to carry the load.

Wind resources in Oklahoma rank it 9th in the nation, and the state is starting to take advantage of this resource, now ranked 6th in terms of wind power generation as of 2012. That’s 3,130 megawatts, and this new agreement will push the state’s total generation closer to 4,000 megawatts.

“With these long-term power purchase agreements we’re adding a significant amount of Oklahoma wind energy, bringing more diversity to our fuel mix, and doing so at a price that will provide substantial savings for our customers,” said PSO President and COO Stuart Solomon in astatement in Friday.

Source: Climate Progress. Reproduced with permission.