Take Action in Louisiana
Government officials in Oklahoma and Texas have investigated Wind Catcher and deemed it too risky for consumers. According to them, the project is at risk for cost overruns while failing to deliver benefits to consumers.
Wind Catcher would shift the risks and costs of this project to Louisiana electricity consumers, while none of the economic benefits will flow to the state. We would most likely see HIGHER prices. We don’t need to import electricity. Locally generated electricity keeps prices low AND keeps jobs and tax revenue in our communities.
Wind Catcher creates jobs and infrastructure in Oklahoma but provides none of these benefits to Louisiana. 4,000 jobs to build the project and 80 permanent jobs will go to Oklahoma – along with millions of dollars in tax benefits. Even so, Louisiana consumers are responsible $1.143 BILLION to build Wind Catcher.
Wind Catcher will Hurt Consumers in Louisiana
Wind Catcher has numerous hurdles to tackle in order to achieve success – including gaining approval in Arkansas, Oklahoma, Texas and Louisiana.
The project has a short window of time to obtain these approvals in order to qualify for necessary tax credits. Regulatory approvals take time, and having to navigate politics in four states is a huge risk to Louisiana electricity customers.
Even if the project is approved, cost overruns and underperformance are very likely and will result in annual rate increases for consumers.
All the jobs and infrastructure for this project benefit Oklahoma with none of these benefits flowing to Louisiana. Even so, Louisiana consumers are responsible for Wind Catcher costs.
Louisiana should not ignore the high risks of this project without fully considering alternatives that may make more sense for consumers and for our local economy.
Jobs and Economic Benefits are Needed in Louisiana
Louisiana is finally emerging from a near two-year recession, but economists across the state agree Louisiana’s economy continues to lag well behind the rest of the country.
Louisiana ranks well below the national average in employment-to-population ratio for those in their prime-working years – a statistic used to measure economic success. The employment figures from U.S. Department of Labor show Louisiana near the bottom as compared to other states.
Louisiana must fight to bring jobs and tax income to our state and communities … not surrender them to other states.
Wind Catcher is Risky for Consumers
Electricity consumers in Louisiana will bear the risk of the huge costs to build and maintain the project but get none of the economic benefits. Even with all the risk involved, higher costs down the road are likely.
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.
Numerous industry experts across the country have criticized the Wind Catcher project calling it too risky.
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 mega-project requiring regulatory approval in four states (Oklahoma, Arkansas, Texas and Louisiana). The project’s future is highly uncertain because any delay in the process in any state will have a significant impact on the price and ultimate cost to consumers.
There are so many moving parts and they all have to go just right. 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, consultant John Athas said the company building the project has not demonstrated that Wind Catcher is among the least cost alternatives available.
In Texas, engineering specialist David Smithson 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 opposes 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 Wind Catcher 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, Louisiana decision makers should stop this project now.
Risk of Qualifying for Production Tax Credit
Wind Catcher must fully qualify for the Production Tax Credit (PTC) in order to sustain projected savings and it is NOT guaranteed. The economic value of PTCs depends on several factors:
- 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 Louisiana customers.