From: Russell Ray, Tulsa World
Published March 3, 2005 12:00 AM

AEP Gets Nod to Purchase Wind Power

TULSA, Ok. — An agreement that calls for AEP-PSO to buy power from a wind farm planned near Lawton was approved Wednesday by state regulators.


The Oklahoma Corporation Commission approved a settlement between American Electric Power-Public Service Co. of Oklahoma and Zilhka Renewable Energy's Blue Canyon II wind farm project.


AEP-PSO will buy power from the 120-megawatt facility under a 10-year contract. Construction is expected to begin in May on a 4,500-acre site north of Lawton.


"With this agreement, PSO continues to diversify its energy portfolio and solidify our position as the largest purchaser of wind energy in the state," said AEP-PSO President and Chief Operating Officer Stuart Solomon.


The cost of the contract was not disclosed. But commission staff and the state attorney general's office signed off on the agreement, saying it contains fair, just and reasonable rates and will benefit AEP-PSO customers.


The wind farm will be able to generate enough power for 34,000 homes. Construction should be completed by the end of this year.


"We think this is going to help keep the electric rates low for PSO's customers," said Wayne Walker, Zilhka's director of project development. "It's also going to provide significant environmental and economic benefits for the state of Oklahoma."


Zilhka pursued a contract with AEP-PSO under the Public Utility Regulatory Policies Act, which requires utilities to purchase power from qualified generation facilities.


But Zilhka dropped its request under PURPA after reaching a deal with AEP-PSO and regulators. By removing PURPA, Zilhka was able to build a bigger facility, Walker said.


"With the larger project, we were able to make some concessions on the pricing," he said.


In addition to its contract with Zilhka, AEP-PSO has contracted to buy another 106.5 megawatts of wind power from the Weatherford Wind Energy Center, which is under construction on a 3,800-acre site just west of Weatherford. Commercial operation is expected to begin this spring.


AEP-PSO has about 4,000 megawatts of generation capacity. After both wind power projects are complete, wind-generated electricity will comprise about 5 percent of AEP-PSO's total generation capacity.


Blue Canyon II involves the construction of 67 1.8-megawatt wind turbines. The original Blue Canyon Wind Farm, with a capacity of 74.25 megawatts, was completed in 2003.


AEP-PSO serves more than 500,000 customers, including 285,000 in the Tulsa area.


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