Answer to Oklahoma's Growing Fuel Costs Found Blowin' in the Wind

Answer to Oklahoma's Growing Fuel Costs Found Blowin' in the Wind

Aug 28 - The Daily Oklahoman

In the quest for affordable energy, what might have been unthinkable less than 10 years ago now is a hot commodity.

That's because every extra megawatt hour of power generated by wind means one less utilities have to generate using natural gas.

Executives for both Public Service Co. of Oklahoma and Oklahoma Gas and Electric Co. say that is why they eagerly are pursuing plans to add significant amounts of wind power to their systems.

"We need to continue to add wind to diversify our generating options" for power, said Jesse Langston, the vice president of commercial and utility operations for OG&E.

"It is a natural hedge against increasing natural gas costs, which we have seen a dramatic run up in during the past year or so," he said. "So for our customers, it makes sense for us to begin to add this resource."

Signing on OG&E, which serves 762,000 customers in a service area spanning 30,000 square miles in Oklahoma and western Arkansas, first announced in 2003 that it would buy electricity generated by wind turbines in northwestern Oklahoma.

Florida-based FPL Energy agreed to build and operate the farm for OG&E, consisting of 34 wind turbines spread across land north of Woodward.

In 2007, the utility brought another farm online near Fort Supply, more than tripling the company's portfolio of wind energy, giving it a total of about 170 megawatts of wind-generated power. That's enough to power more than 50,000 homes. Later that same year, Pete Delaney, chairman, president and chief executive officer of parent company OGE Energy Corp., announced the company would seek to quadruple that amount during the next four years.

PSO, meanwhile, entered the wind power market in 2004 when it made a long-term agreement to buy up to 106.5 megawatts of power from a wind farm being developed by FPL energy on a 3,800-acre site near Weatherford. Later, that amount was increased to 147 megawatts.

The utility, which serves about 525,000 customers in eastern and southwestern Oklahoma, said at the time the inclusion of the power for its customers might actually lower their bills. The company has been adding contracts to buy wind power ever since, from developments near Lawton and Fort Supply. This year, PSO -- a subsidiary of American Electric Power -- is using about 400 megawatts of wind power and has announced it is looking for up to another 200 megawatts of power to add to its system, which has 4,400 megawatts of generating capacity.

Good, better deals Utility officials say the nice thing about wind power is that its costs are constant, because rates are locked in by contract when deals are made to build the farms.

That means the utilities -- and their customers -- are able to get more affordable power, no matter how high costs rise for more traditional forms of energy, they said.

"The wind deals we did early on were economic in the beginning," explained Stuart Solomon, PSO's president and chief operating officer.

"And when you look at what it costs to generate a megawatt of power with natural gas today, what we are paying for that wind power really is economic now."

Solomon noted that the price to build wind farms has nearly doubled in the past four years, but added, "wind power still can make a whole lot of sense, with natural gas prices where they are."

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