SWEPCO told "No" in Texas but proceeds with 810-MW wind buy

The Public Utility Commission of Texas has rejected Southwestern Electric Power Co’s (SWEPCO’s) plan to serve its clients in the state through the partial acquisition of a 1,485-MW wind project portfolio in Oklahoma.

The three wind parks in question were planned to supply electricity to the utility’s clients in Arkansas, Louisiana and Texas. Although the proposal was not cleared in Texas, the two other states will still benefit from the acquisition plan as will Oklahoma, the subsidiary of utility American Electric Power Company Inc (NYSE:AEP) said on Thursday.

SWEPCO is seeking to acquire 54.5% stakes in three power plants, collectively called the North Central Energy Facilities, giving it 810 MW of the portfolio’s overall capacity. The capacity that was planned to serve its Texas clients was 309 MW.

Simultaneously, the Public Service Company of Oklahoma (PSO), SWEPCO’s sister company, will buy the remaining 45.5% in the wind cluster to supply power in Oklahoma. It has already secured regulatory permission in its home state.

AEP confirmed its commitment to spend around USD 2 billion (EUR 1.78bn) on the acquisitions, of which USD 1.01 billion will be invested by SWEPCO. The latter’s president and chief operating officer, Malcolm Smoak, said that the rejection in Texas would “not affect the project’s full viability.”

Regulators in Arkansas and Louisiana have already cleared SWEPCO’s plan. Each of those states has made provisions to lift the share of megawatts they would receive if SWEPCO fails to get approval in other states. With these options, around 464 MW will go to Louisiana and 268 MW to Arkansas. The remaining 78 MW will be offered to wholesale customers, SWEPCO said.

The Federal Energy Regulatory Commission (FERC) has given the thumbs-up to the acquisition of the wind facilities by SWEPCO and PSO. All assets in question have been developed by Chicago-based Invenergy and will be sold upon completion, over the next two years.

(USD 1.0 = EUR 0.890)

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