Take Action in Arkansas
Arkansas electricity consumers bear the risk and the cost to build and maintain Wind Catcher but get none of the economic benefits, and we could see higher prices down the road. Wind Catcher project jobs – 4,000 to build the project and 80 permanent jobs – will go to Oklahoma. Millions of dollars of tax benefits will go to Oklahoma. We don’t need to import electricity. Locally generated electricity keeps prices low AND keeps jobs and tax revenue in our communities.
Wind Catcher is a Bad Energy Deal for Arkansas and Will Hurt Consumers
A lot must go right for Wind Catcher to be successful, including gaining approval in Arkansas, Oklahoma, Texas and Louisiana. Getting approval in a timely way is a huge assumption and a big risk to Arkansas electricity customers. Cost overruns and underperformance could result in annual rate increases for consumers.
The project creates jobs and infrastructure in Oklahoma but provides none of these benefits in Arkansas. Even so, Arkansas consumers are responsible for Wind Catcher costs.
Arkansas should not let big industry off the hook on this project without fully studying risks and considering alternatives that may make more sense for consumers and for our local economy.
Arkansas Needs the Jobs and Economic Benefits
Our economy is getting better and the outlook is good, but economic growth is slow and we still lag behind much of the rest of the country. Arkansas Economic Development Institute economist Dr. Michael Pakko believes the cycle of state economic growth that began in 2014 will continue in 2018, but not at a spectacular pace. He predicts the jobless rate might rise to 4% during the year.
It is important for Arkansas’ future to bring jobs and tax income to our state and communities … not give them away to other states.
Wind Catcher is Risky for Consumers
Arkansas electricity consumers bear the risk of the cost to build and maintain the system but get none of the economic benefits. We could even see higher prices down the road.
The initial cost savings projected by Wind Catcher could turn into higher electricity prices in the long run. Cost overruns and underperformance could result in huge annual rate increases for consumers.
The Wind Catcher project has been criticized by numerous experts.
Karl Nalepa, an energy economist, recommended the Public Utility Commission of Texas reject the proposal because the “estimate of benefits is very uncertain” while ratepayers would bear “all risk."
Wind Catcher Faces Uncertainty
Wind Catcher is a massive project requiring approval in four states (Oklahoma, Arkansas, Texas and Louisiana). Its future is uncertain and delay in the process in any state can have a significant impact on the price and ultimate cost to consumers.
A lot of things must fall in place just right, but Wind Catcher projections may be based on faulty assumptions about receiving timely approvals in numerous jurisdictions and property owners, as well as projections about our energy future.
In Arkansas, John Athas, a consultant testifying on behalf of the Arkansas Public Service Commission’s general staff said that the company building the project has not demonstrated that Wind Catcher is among the least cost alternatives available.
In Texas, David Smithson, an engineering specialist with the Public Utility Commission of Texas, registered concerns about reliability and costs saying, “I recommend that the Commission deny the Application, based on the risk it poses to Texas retail ratepayers.”
Even in Oklahoma, which will benefit from jobs and tax revenue, Attorney General Mike Hunter has blasted the project because:
- Approval in neighboring jurisdictions appears unlikely, so moving forward with the case is a waste of taxpayer, ratepayer, and stakeholder resources;
- The project failed to comply with the law that protects ratepayers from bearing the costs for unreasonable projects that do not benefit them; and,
- Wind Catcher failed to comply with the Public Utilities Commission competitive bidding rules and did not request pre-approval of the project as required.
Frank Mossburg, testifying for the Oklahoma Corporation Commission that must approve the project, said the commission should not approve the project because it has not been shown that acquiring 500 MW of additional wind is a reasonable procurement strategy and the company has not justified a waiver from competitive bidding requirements.
Given the opposition in neighboring states, risks to consumers, and questionable benefits, Arkansas decision makers should stop this project now.
Risk of Failing to Fully Qualify for Production Tax Credit
Wind Catcher’s ability to qualify for the Production Tax Credit (PTC) is vital to sustain projected savings. The project's eligibility for the tax credits is not guaranteed. The economic value of PTCs depends on several variables:
- How much wind energy is produced;
- Whether, and to what extent the Wind Catcher Project meets eligibility deadlines and requirements;
- Whether current tax policy authorizing the PTCs is revised in future years; and
- Whether and when the Company can use the tax credits based on other changes in corporate tax rates.
Any delay in the project risks eligibility for the Production Tax Credit.
If the PTC is compromised, so are Arkansas customers.
Arkansas Electric Customers Can’t Afford to take this Risk! Tell Arkansas decision makers to stop this project now before it is too late!