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Feb 19, 2010

Oklahoma IOUs back voluntary RPS legislation, more lines

Oklahoma IOUs back voluntary RPS legislation, more lines

Oklahoma’s two major investor-owned utilities said Wednesday that they support a state energy bill that would establish a voluntary renewable portfolio standard, encourage the development of new wind-related transmission lines, and nudge the IOUs toward natural gas-fired plants instead of coal when they need new baseload capacity. The Oklahoma House of Representatives’ Energy and Utility Regulation Committee late Tuesday unanimously approved H.B. 3028, whose voluntary RPS calls for 15% of the state’s total installed generating capacity to be renewable in nature by 2015.

The bill which was sponsored by House Speaker Chris Benge, a Republican, now goes to the full House, where approval of the bill — possibly with some modification — is considered likely, said Dusty Darr, a research analyst in Benge’s office. A similar Senate bill is under development. Darr said that Benge introduced the measure in part to show that Oklahoma is serious about the development of new wind farms and other renewable projects, and to encourage wind-turbine manufacturers to site new facilities in the state.

“The Oklahoma Department of Commerce has made clear that a number of [renewable energy] companies are building new facilities in states that show support for renewables” by implementing renewable portfolio standards, Darr said. Oklahoma already has lost several such plants to other states, he added. H.B. 3028 also calls for the state and the Oklahoma Corporation Commission to work with the Southwest Power Pool “to develop plans to expand transmission capacity in the state” to support the addition of new wind farms. “The SPP is developing a list of priority [transmission] projects and it is very important that Oklahoma do everything we can to show that we need priority projects here,” Darr said. In particular, wind developers believe that a $336 million, 120-mile, 765-kV line across the Oklahoma Panhandle from Hitchland to Woodward is needed if the Panhandle is to take full advantage of its vast wind resources.

Also, H.B. 3028 would establish natural gas as “the preferred choice” over coal for any new fossil-fired plants that may be built in Oklahoma. “Any electricity-generating entity in the state choosing a fossil fuel source other than natural gas may provide evidence to the [OCC] or other appropriate governing body that the fossil fuel source is in the best interest of the Oklahoma electric consumers,” the bill states. Stan Whiteford, spokesman for Public Service Co. of Oklahoma, said that PSO has “worked pretty closely with Speaker Benge on the bill, and we can support the renewable goal, the natural gas preference, and the robust transmission goal.” He noted that more than 12% of PSO’s existing generation portfolio is wind-based, so meeting the 15%-by-2015 goal should be doable.

Oklahoma Gas & Electric spokesman Brian Alford said that OG&E believes that Benge “put together a very solid, wellrounded bill that we can support. The speaker was very proactive in reaching out to us and others” as the measure was being drafted, he said. “Oklahoma has done an outstanding job developing its wind resources and done so without an RPS,” Alford said. “We believe we can continue to grow our wind production without any type of mandate,” a reference to the fact that the RPS goal in H.B. 3028 is voluntary.

Regarding new fossil-fired generation, Alford noted that OG&E has stated that its goal is to delay the addition of any such generation until at least 2020 by focusing this decade on energy efficiency and new wind farms. He added that the bill’s language would give utilities the opportunity to “make the case” for new coal-fired generation if they believe that it would be in the best interest of their customers. The two IOUs have both been expanding their wind portfolios in recent years. PSO, a subsidiary of American Electric Power, has 591 MW of wind capacity under contract through long-term power purchase agreements, and OG&E either owns or holds PPAs on 550 MW of wind capacity, 270 MW of which is in operation and 280 MW of which will be under construction this year.

OG&E also has said that it plans to build at least $600 million of wind-related transmission projects over the next four years to facilitate the delivery of increasing amounts of wind
power from Oklahoma’s Panhandle region to population centers. — Housley Carr

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