A preapproval case for Public Service Co. of Oklahoma's Wind Catcher project will go ahead after an administrative law judge ruled Thursday against a motion to dismiss the case brought by Oklahoma Attorney General Mike Hunter.
Without comment, Corporation Commission Administrative Law Judge Mary Candler denied the attorney general's motion in a hearing Thursday morning. However, Candler approved another motion to have PSO pay for witness fees and other case costs for the attorney general's office, which represents consumers in utility cases.
The attorney general's office argued PSO failed to follow competitive bidding rules and didn't show additional need for generation in the $4.5 billion Wind Catcher project. The project will involve a 2,000-megawatt wind farm in the Oklahoma Panhandle and a dedicated transmission line to take the electricity to 1.1 million customers of PSO and its sister utility, Southwestern Electric Power Co.
PSO's share of the project is estimated at $1.36 billion. PSO wants the commission to waive competitive bidding rules and allow preapproval to recover costs from customers once the project is in service by late 2020.
The utility said it needs a decision from Oklahoma regulators by the end of March to proceed with the project. Construction on the wind farm began last year, although developer Invenergy needs to meet additional deadlines in order to fully qualify for federal production tax credits for wind.
The project also needs approval from state regulators in three other states and the Federal Energy Regulatory Commission.
PSO estimates the Wind Catcher project would add another $78 million to customer rates in 2021. Those higher costs would be offset by federal tax credits and fuels savings, PSO said in testimony filed in the case.
In a statement, Hunter said his office respected Candler's decision and appreciated her ruling to provide the attorney general's office with the resources necessary to evaluate the case on behalf of PSO's customers.
"With customers potentially being burdened with the over $1 billion price tag associated with this project, it is vital for laws and regulations to be followed to ensure customers are getting the best price for quality services," Hunter said in the statement. "We look forward to working with the Corporation Commission, PSO and stakeholders to resolve this matter in a way that respects the laws and constitution of the state of Oklahoma and interests of ratepayers."
PSO rate case
Separately, the three-member Corporation Commission approved a preliminary schedule for PSO's $156 million rate increase, which was filed at the end of June. If approved in full, the rate increase will add $14 per month to the typical residential customer bill.
Public hearings in the rate case will begin at 8:30 a.m. Oct. 30 in Courtroom 301 at the Oklahoma Corporation Commission in Oklahoma City. Candler, the administrative law judge in the rate case, is to have a report and recommendation to the commission by Dec. 11.
If the case extends beyond 180 days, PSO said it may implement interim rates on or after Jan. 13. Interim rates are subject to refund.