Ark. Appeals Court Blocks Turk Plant; SWEPCO Files Appeal, Will Continue Construction

An Arkansas appeals court last week overturned on technical grounds a key decision by the state regulators that authorized construction of Southwestern Electric Power Co.’s (SWEPCO’s) 600-MW John W. Turk Jr. coal-fired power plant in Hempstead County—the nation’s first ultrasupercritical project. SWEPCO on Monday filed an appeal with the Arkansas Supreme Court and said it would continue the plant’s construction because delays could prove costly.

The Arkansas Court of Appeals on June 24 overturned (PDF) the Arkansas Public Service Commission’s (APSC’s) November 2007 decision to grant a Certificate of Environmental Compatibility and Public Need (CECPN) to the $1.6 billion project. It ruled on the grounds that APSC had “erred by failing to resolve all matters in a single proceeding as required by Arkansas Code Annotated section 23018-502,” a clause related to the state’s Utility Facility Environmental and Economic Protection Act.

A CECPN is legal authorization granted by the state of Arkansas to a regulated utility to construct a power plant or transmission facilities and is only issued after public and formal review by the state and interested stakeholders. The June 24 ruling favored landowners, including the Hempstead County Hunting Club, Schultz Family Management Co., Po-Boy Land Co., and Yellow Creek Corp.

Writing for the court, Judge Karen Baker said, “If SWEPCO chooses to reapply for a CECPN, [we] direct the APSC to conduct a single proceeding in compliance with the Utility Act, to make the statutory findings required, to resolve all matters regarding the generating plant and transmission lines and basis of need for such a facility in a single proceeding, and provide the appropriate notices with adequate opportunity for interested parties to participate in the decision.”

On Monday, SWEPCO—an American Electric Power subsidiary—filed a six-page appeal (PDF) with the Arkansas Supreme Court, saying that the Court of Appeals had “erroneously reversed the APSC based on an incorrect construction of the Act.” The appeal argues, among other things, that the “ruling abandons 150 years of final-order precedent,” and that the court’s decision conflicts with a prior appellate court case in which it found that “something more than mere error is necessary.”

A SWEPCO team also told reporters at a press conference that it would continue construction of the plant. “By law, the CECPN issued by the APSC remains in effect during the appeal process,” said Paul Chodak, SWEPCO president and chief operating officer. “The APSC approval was overturned because the court objected to the approval procedure and not because the judges objected to the Turk Plant. We believe the Turk Plant holds the best future for long-term reliability and affordable power for our customers.”

Chodak said that if SWEPCO was forced to stop construction of the plant, it would cost valuable time and money. “Approximately $713 million has already been spent on plant construction, and a total of $1.3 billion has been committed [in contracts]. It would cost even more to stop construction and then restart it.” he said. “These costs have been prudently incurred under an order of the Arkansas Public Service Commission. The longer it takes for construction, the longer it takes for customers to get an additional power resource and the more it will cost customers in the long run. It will also affect the expected jobs and the needed revenues that will go into Arkansas’ tax base.”

He added that stakeholders—including community leaders, business and economic development groups, and elected officials—had expressed support for the project and wanted to see the plant completed. “They realize its importance to individual customers and to the health of the state’s economy.”

Regulators in Arkansas, Texas (July 2008), and Louisiana (March 2008)—states served by SWEPCO—have approved the Turk Plant project. The plant also received the required air permit from the Arkansas Department of Environmental Quality in November 2008—though that permit is also under appeal before the Arkansas Pollution Control and Ecology Commission. “Our efforts over the past several years have followed the standard regulatory process of each state. SWEPCO prudently followed the Arkansas rules in an established regulatory process. But the court’s decision rejected that process, which has been used and relied upon for decades,” Chodak said.

He said the company was fully focused on the appeal, and “didn’t care to speculate” what would happen if the Supreme Court rejected it, though he said “that it would have to be resolved with the [APSC].”

Chodak stressed that the stakes were high—and the project too large to “kill.” As well as pioneering a “cleaner coal” technology, 12% of the project is owned by electric cooperatives. The court’s decision also affects the plant’s construction and work force. Chodak said that millions of dollars had been already spent to purchase 90% of the plant’s equipment and that the workforce of some 720 people were in the process of laying concrete. “Winding down this project, just closing down the construction process, would be in the order of $100 million,” he said.

If the plant were “killed,” it could also put the region’s energy security in jeopardy. In addition to the Turk plant, SWEPCO is building the 508-MW combined-cycle natural gas–fired Stall Unit in Louisiana—a project slated for completion in 2010—to meet intermediate load, and it recently completed the 340-MW simple-cycle, natural gas–fueled Mattison Plant in Tontitown, Ark., to help meet peak demand on the SWEPCO system.

The timetable for the appeal process is uncertain. If the Arkansas Supreme Court grants SWEPCO’s request for review, the court may elect to accept briefs or oral arguments, but there is no specific timeframe for a decision. The Supreme Court will be in recess from mid-July until after Labor Day.

The Turk Plant’s ultrasupercritical advanced coal combustion technology will use less coal and produce fewer emissions, including carbon dioxide, than traditional pulverized coal plants. The plant will use low-sulfur coal and will include state-of-the-art emission control technologies, including a design that allows for the retrofit of carbon dioxide controls. “It will be one of the cleanest, most efficient coal-fueled plants in the United States,” Chodak said.

For a special report on the Turk plant’s steam turbine system, see “Designing an Ultrasupercritical Steam Turbine” in the July issue of POWER.

Sources: POWERnews, SWEPCO, Arkansas Court of Appeals

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