Interview: Oklahoma's Michael Teague
Fast-growing wind power Oklahoma doesn’t require a mandate to achieve its renewable energy goals as the state has stable “rules of the game” that encourage sector investment, Michael Teague, secretary of energy and environment, tells Recharge.
“Do you really need the mandate to get demand? If you have the transmission, the workforce, the natural resources and the state regulatory [framework], then you don’t need it because the business will take care of itself,” he says.
Electric utilities in Oklahoma have already exceeded the 2015 renewable energy goal set by the state legislature of deriving 15% of their total installed generation capacity from renewable sources. Energy efficiency may be used to meet up to 25% of the overall goal.
Wind provided 14.8% of the state’s electricity in 2013, according to the American Wind Energy Association. Other eligible renewable energy resources include solar, hydro, hydrogen, geothermal and biomass.
Oklahoma also differs from most other states in not requiring utilities to purchase and retire renewable energy credits (RECs). Instead, utilities with power plants must file a report to the Oklahoma Corporation Commission (OCC) each year by 1 March detailing their generation sources, installed capacity, kilowatt-hours produced and the energy source for each facility.
Utilities must also file a report with the OCC each year detailing and quantifying the energy efficiency programs they administer.
Oklahoma has surged up the US wind generation capacity installation table in recent years and now ranks sixth among states with 3.134GW on 1 January, AWEA data shows. The 26 active wind farms represent more than $6bn investment.
Teague, who took over an expanded portfolio last 3 September that now includes the environment, says that wind developers remain keen to keep investing in Oklahoma. That bullish outlook, however, could be tempered by uncertainty whether Congress will renew the federal renewable electricity production tax credit (PTC) which expired at the end of 2013.
Teague expressed frustration with the inability of Congress to decide whether the PTC should stay or go away permanently. The annual guessing game over the incentive has led to boom-and-bust cycles in the wind industry.
“We need some consistency – it’s the best word I can use to describe it,” he says. “To have these rules up, down, back, forth, expired, reinstated, made retroactive, then not retroactive. It’s kind of crazy. We need to just put them in place and be done with it. Then let everyone made good business decisions.”
While the industry expects Congress to renew the PTC after 4 November national elections, not doing so would leave Oklahoma better placed than most states to complete against fossil fuels given the quality of its wind resource.
In the meantime, Governor Mary Fallin’s administration does not plan any further policy changes to further encourage wind investment. “I think what we have is more than sufficient,” says Teague.
The focus remains on carrying out the 2011 Energy Plan which is to develop all of the state’s abundant energy resources and create jobs for Oklahomans. Going forward, he sees a need for the more transmission capacity in the state, although recent additions can support existing wind generation capacity.
The administration is supporting a proposal by Houston-based developer Clean Line Energy Partners to build a proposed 700 mile (1,126km) overhead high-voltage direct current transmission line that would transport several gigawatts of wind power from Oklahoma and Texas to southeastern states.
“The Clean Line project is an important piece for us,” he says, referring to the “Plains and Eastern” transmission line that would cost $2bn to construct.
Teague notes that Oklahoma places great value on wind power as it does not require water to generate energy. “I don’t know if people understand that advantage,” he says adding, “We should be talking about this.”Parts of the state are suffering from almost four years of drought.
Teague is no stranger to water or infrastructure issues. During his career in the US Army – he retired with a rank of colonel – he was Tulsa District commander of the Army Corps of Engineers. In that role, he oversaw 700 employees in engineering, conduction and operations, as well as an annual budget of $700m.