US utility AEP has returned to the large-scale US wind market with a 1.5GW, $2bn plan based in the state of Oklahoma, a year after it scrapped the 2GW Wind Catcher Energy Connection development proposal there.

Unlike the single-site Wind Catcher targeted for the state's remote Panhandle region, AEP subsidiaries are seeking regulatory approvals to acquire three projects with 999MW, 287MW and 199MW nameplate capacity, respectively, in western areas closer to electric load centres in the region.

The smallest of the wind farms under development by Chicago-based Invenergy would be operational by the end of 2020, qualifying it for the federal production tax credit at full value - $24/MWh for delivered electricity over its first decade of operation.

The other facilities would come online in 2021, enabling them to benefit from 80% PTC value, AEP said in a statement. The PTC expires on 31 December.

Public Service Company of Oklahoma (PSO) will seek a green light from utility regulators there, something it was unable to achieve with the $4.5bn , four-state Wind Catcher due to community and high-level political opposition.

Sister utility Southwestern Electric Power Company (SWEPCO) will try and do the same in Arkansas, Louisiana and Texas.

It was rejection of Wind Catcher by the Texas Public Utility Commission - commissioners there said it did not provide sufficient benefits for ratepayers - that led AEP to pull the plug on what was the largest single-site wind project proposal in the western hemisphere. Arkansas and Louisiana did give their consent.

AEP chief executive Nick Atkins later said one lesson learned from Wind Catcher being "so intensive" was the company needed to go smaller with development of wind farms and be "mindful of the political situation in each of our state jurisdictions and the resources that they're looking for."

Differences with Wind Catcher

AEP lead spokeswoman Tammy Ridout told Recharge these projects differ from Wind Catcher in several important aspects.

First, the projects will connect to the existing grid as opposed to a new, dedicated 360-mile (580km), 765kV overhead transmission line that would have brought Wind Catcher's electricity across Oklahoma east to PSO and SWEPCO customers. That line was controversial and costly.

"We are not proposing to build anything transmission-related to this project at this time," she said. "These projects are closer to the existing grid and will use local interconnections."

What about growing transmission congestion in the Southwest Power Pool (SPP), which operates the bulk electric grid and wholesale power market in all or parts of 14 interior states that comprise much of the US wind belt?

"We wanted to look for projects that minimise congestion on the transmission system as that can have a significant impact on the projects' costs," she said. SPP did not immediately respond to a request for comment on the congestion issue and what it was doing to lessen it.

Second, PSO issued a request for proposals for the new capacity. "It was a competitive process," said Ridout, versus Wind Catcher that was not competitively bid as the Oklahoma'Corporation Commission requires. AEP had argued there wasn't time with Wind Catcher to qualify it for 100% PTC.

Third, AEP is directly addressing the issue of ratepayer benefits with these new projects as it has support from a wide range of customers including cities, companies and universities "looking to us to help them meet their renewable energy goals," she said. These include economic and environmental benefits.

Lastly, AEP has more flexibility with the size of its new projects compared with the hulking Wind Catcher whose scale and proposed cost recovery was unprecedented in the US for rate-regulated utilities.

Ridout said AEP can scale the projects to a "certain amount depending on what the commissions determine they need for their states." AEP estimates the multi-site development would save PSO and SWEPCO customers a net $3bn over 30 years.

The Federal Energy Regulatory Commission (FERC), which regulates inter-state transmission and bulk sale of electricity, must also approve AEP's build-own-transfer arrangement for the wind farms.

If all goes as AEP proposes, SWEPCO would own 810MW of capacity and PSO 675MW.

No wind farms exist today in either Louisiana or Arkansas, but neighbouring Texas and Oklahoma are the largest US state wind markets, and both remain hotbeds of development and construction activity.

AEP, based in Columbus, Ohio, is among a growing list of traditional US fossil fuel-heavy utilities that are transitioning, in part, to cleaner and lower-cost renewables despite pressure from President Donald Trump’s administration to keep coal-fired plants in operation.