Texas PUC Denies Wind Catcher

The Public Utility Commission of Texas just DENIED a CCN for AEP's Wind Catcher project.

Wind Catcher is done.

And here's a perfect example of how mainstream media takes its direction from corporations.

Largest U.S. Wind Project Dealt Potentially Fatal Blow in Texas

Potentially?  No, Wind Catcher is dead.  Not potentially dead.  Laying on the side of the road in a matted mess while being feasted on by flies and vultures dead.

Because Bloomberg doesn't want it to be so, and because Bloomberg would never, ever report a fact without the permission of a corporation, Bloomberg pretends there's some way for AEP to take Wind Catcher for a Weekend at Bernie's.

“We’re extremely disappointed in today’s Public Utility Commission of Texas’ decision rejecting our Wind Catcher proposal,” Melissa McHenry, an American Electric spokeswoman, said in an email. “We are evaluating our options.”

Options?  Okay, lets evaluate your options, AEP.  You can spend months asking for rehearing in Texas and then appealing the denial in the courts while taking on billions of dollars in debt to build the project.  You can reassign all the Texas costs to Louisiana and Arkansas, since they approved it, and let Texans have that stuff for free.  You can try to take the project merchant, apply for negotiated rate authority, and then try to find enough customers to finance it while taking on billions of dollars of risk that you won't find enough customers.  You can build this project and operate it at a loss by providing real customer protections.  There are no good "options" here.  The best option is to abandon the project and withdraw your application in Oklahoma.  Done.  Move on.

Honestly, after yesterday's earnings call I'd have thought you had the whole abandonment packaged and ready to go.  Obviously AEP expected to be denied in Texas, Oklahoma, or both.  Maybe this guy was kidding himself about how much time he had.

Awwww.... who's a gloomy gus?  Why don't you go have some nice beer and chicken wings?  Play some music.

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Maybe you should have listened to this one months ago.

Everyone saw this coming but you, AEP.

“Looks like curtains to me,” said Paul Patterson, an analyst at Glenrock Associates LLC. “Almost everyone was opposed to this. Barring any big concessions from AEP, it looks to me like it’s dead.”

What was it you told analysts again on your earnings call yesterday?

Ali Agha - SunTrust Robinson Humphrey, Inc.
Thank you, good morning. Good morning. First up, on Wind Catcher, Nick, to be clear, if either Texas or Oklahoma does not approve, can the project still go forward or do you need both of those approvals for this project to happen?
Nicholas K. Akins - American Electric Power Co., Inc.
Yeah. My going-in assumption is we need both of those approvals, because these are regulated jurisdictions and that's where the needs are. And so, our – certainly, our strong preferences for that project is sized based upon the wind farm that's in existence with the transmission line and to do something different than that would be suboptimal so, we're really focused on making sure that all of the jurisdictions approve it.

Paul Patterson - Glenrock Associates LLC
And then, also – and just to clarify on the Ali Agha's question. There is really, I guess, no sort of Wind Catcher light or – I mean, basically, it's kind of you guys might do other things, obviously, you're always looking for things and other opportunities, but it sounds like, essentially, it's kind of – this deal is kind of – it's kind of a pretty much not really given to any significant modification, if this doesn't have – if there's a rejection or something like that, we shouldn't think of there being a sort of Wind Catcher light opportunity per se with respect to this project, is that correct?
Nicholas K. Akins - American Electric Power Co., Inc.
That's correct. I think you could see, I mean, obviously, with the integrated resource plans that we followed, you may see smaller projects develop in some fashion but they could be renewables, may not be renewables. So, you really – but you won't see another Wind Catcher-like project because that one has – that one's very unique in its scope and scale and the benefits provided. And so, it's – you're probably moving to either less efficient type of opportunities and there certainly will continue to develop those kinds of options. But keep in mind, you should look at AEP as a 5% to 7% foundational growth stock with all these little incremental opportunities.

There are no "options."  Wind Catcher is done.  Anything else is just stupid.

Look at this.  That huge dip coincides with the denial in Texas.  However, it looks like investors shook it off and didn't sit around dithering over "options."

Since the media is so slow on this one, go watch the video of the PUCT meeting for yourself.  To get right to the punchline, click Item 4 on the menu on the right, then fast forward to about minute 40.

Wind Catcher is over and done.  It was so ambitious from the outset that it bordered on insane.  Maybe AEP ought to look at its management and make adjustments.  Who looked at the faces of the Texas PUC during the July 12 Open Meeting and thought there was a good chance they would approve this thing?  C'mon, you were only fooling yourselves!  So, who isn't getting their bonus this year because of this?  I figure if all the bigwigs don't get a bonus it just about might pay for the "tens of millions of dollars" already spent on a project that never stood a chance.

This time the risk is all on you, AEP.