Southern Power has acquired the 100MW Wildhorse Mountain wind project in Oklahoma, adding another notch to its partnership with developer RES Americas, even as US utility giant Southern Company otherwise moves to slow the growth of its independent generation arm.

Wildhorse Mountain, due for completion in late 2019 in Oklahoma’s southeastern Pushmataha County, was co-developed by Vestas – and will use turbines from the Danish OEM. RES is building the project and providing balance-of-plant services, while Vestas will stay on to maintain the wind farm for 20 years.

Terms of the project acquisition were not disclosed. Wildhorse Mountain has a 20-year PPA with the Arkansas Electric Cooperative, which sources power for more than a dozen electric cooperatives in the neighbouring state of Arkansas.

Southern’s acquisition of the Wildhorse Mountain project is a “shining example of our collaborative partnership with RES”, says Southern Power chief executive Mark Lantrip, referring to the strategic wind development agreement the two companies signed in late 2016 to build 3GW of onshore wind between 2018 and 2020.

Yet while the acquisition indicates that Southern’s wind partnership with RES remains on track, the utility group has in recent months confirmed that substantial changes are afoot at Southern Power, including its approach to wind investments.

Southern Company is among the largest US investor-owned utilities, counting Georgia Power, Alabama Power and Mississippi Power among its regulated-utility subsidiaries. But Atlanta-based Southern is looking to repair its balance sheet after facing severe delays and cost overruns at its expansion of its Vogtle nuclear energy plant in Georgia – the only nuclear units under construction in the US, with more than 6,000 workers on site currently.

Earlier this month Southern Company executives confirmed that they will look to fund Southern Power’s planned wind build-out using third-party tax-equity finance – a big change for the independent power producer, which has largely used balance-sheet funding to date.

Southern Power operates separately from Southern’s regulated utilities, selling electricity from its 12.2GW generation portfolio to a variety of off-takers across the country. One-quarter of Southern Power’s portfolio is renewable, and the company ranks among the country’s largest and fastest-growing wind owners.

But its deal with RES notwithstanding – which will allow Southern to use up the turbines it has safe-harbored for the production tax credit – the utility group plans to place a heavier emphasis on the regulated side of its business going forward, while de-emphasising Southern Power.

Southern Power will continue adding renewables projects to its fleet on an "incremental" basis, Southern Company chief financial officer Arthur Beattie told investors on a conference call earlier this month.

"Post tax reform, it is clear that our optimal allocation of capital is reweighted towards our state-regulated utilities," Beattie says.

However, Southern Company's regulated utilities are also growing investors in renewables, including projects in the late-to-bloom Southeastern US.

With an eye towards strengthening its balance sheet, Southern last week announced it will sell its Gulf Power utility and other assets in Florida to rival utility group NextEra Energy.

Separately, Southern Power recently sold a one-third stake in its 1.7GW portfolio of utility-scale solar projects for $1.2bn to Global Atlantic Financial Group, a US-based pension and insurance fund.

Wind

Southern Power buys Wildhorse Mountain from RES Americas