Bad LPSC decision reveals small silver lining

Out of the stupidity witnessed at the last meeting of Louisiana’s Public Service Commission, at least one spot of brilliance emerged.

The PSC approved an application by SWEPCO to foist costs of the Windcatcher project onto Louisiana ratepayers. The decision was expected as staff had worked out an agreement with the producer that includes northwest Louisiana’s Wal-Mart properties agreeing to purchase power from it, a cap on construction costs, qualification for 100 percent of the federal Production Tax Credits, and minimum annual production from the project – similar to a deal made for Arkansas’ regulators’ approval. Building the wind farm and transmitting power to customers with no new need established requires assent from these states plus Oklahoma and Texas.

The project has way too many question marks to merit acceptance. Data sew doubt the project will save ratepayers money over the long haul, especially as federal wind power production tax credits will expire by 2020, too many risks of inefficient production exist, SWEPCO’s has a history of cost overruns (plus onshore wind power typically costs per unit roughly triple that of fossil fuels when considering all factors such as reliability and subsidies), and the likelihood of lower margins on projected sales all should serve to scuttle the effort.

Some of those concerns have eased since other utilities have signaled they would hook into the system. SWEPCO and its Oklahoma partner also have said they would agree to performance guarantees. But other opposition has arisen, including Oklahoma and one of the cities through which transmission wires would go have sued to prevent that, after the Osage Nation already denied use of its land.

Fortunately, regulators in Texas and Oklahoma did their homework and have cast a very skeptical eye on the project, and in July their rejections of it would save Louisianans from their own regulators that probably would make them pay higher rates than necessary. However, one PSC member did distinguish himself on this issue.

The only dissenting vote came from the PSC’s newest member, Craig Greene. Rather than uncritically accepting the company’s line, he noted the nature of wind generation that makes it unlikely to cost less than more conventional means of power production, such as using natural gas. Thus, swapping wind for gas power would unnecessarily raise rates unless gas prices rose significantly.

Given Republican Greene’s past association with Democrat Gov. John Bel Edwards, whether he would vote conservatively on PSC matters didn’t seem certain. But this now makes a couple of high-profile decisions where he voted on the basis of conservative governing principles. He has gone a long way to reward conservative voters who placed their faith in him.