SWEPCO to Press On with Ultrasupercritical Coal Plant Construction

The Arkansas Supreme Court on Thursday declined to reconsider a ruling that voided a permit to build the John W. Turk., Jr. power plant—the nation’s first ultrasupercritical pulverized coal power plant. Southwestern Electric Power Co. (SWEPCO) now says it will continue construction of the plant that is 28% complete under an option to sell power in other markets.

The high court’s decision means SWEPCO no longer has a Certificate of Environmental Compatibility and Public Need (CECPN) for the Turk Plant to serve the company’s Arkansas retail customers. SWEPCO owns 73% of the plant’s 600-MW capacity, and nearly 20% of SWEPCO’s capacity in the plant was designated for its retail customers in Arkansas.

“SWEPCO does not intend to file a new application for a CECPN because of the substantial delay and cost that would result,” the American Electric Power subsidiary said in a statement. “SWEPCO will file notice with the [Arkansas Public Service Commission (APSC)] regarding the change in status of the plant. The change applies only to the Arkansas portion of the Turk Plant capacity and does not require APSC approval.”

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 Supreme Court had on May 13 agreed with the Arkansas Court of Appeals, which last June overturned the APSC’s November 2007 decision to grant the permit to the $1.7 billion project.

Arkansas law provides two options for the construction of new generating facilities: One is for a regulated utility to serve its retail customers and seek cost recovery through rates approved by state regulators. The second option is selling power in other markets, which does not require a CECPN.

“This decision means we will not be able to use electricity supplied by the Turk plant to serve SWEPCO’s retail customers in Arkansas, as was originally planned in this important project,” said AEP CEO Michael G. Morris. “But the Turk Plant will also serve SWEPCO’s retail customers in Louisiana and Texas, where the plant has received regulatory approval. Morris added that the company will fulfill obligations in Louisiana and Texas “in the most cost-effective manner,” while securing other markets for the 88 MW of Turk Plant capacity that would have served its Arkansas retail customers.

Thursday’s ruling by the Arkansas Supreme Court denied separate petitions by SWEPCO and the APSC for a rehearing of the court’s May 13 ruling that reversed the APSC’s decision to approve the Turk Plant in 2007. The court also denied SWEPCO’s motion to delay the effective date of the May 13 decision pending a request to the U.S. Supreme Court to review the case.

The Turk plant is expected to begin operating in October 2012. 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 under appeal before the Arkansas Pollution Control and Ecology Commission.

According to SWEPCO, as of May, 31, 2010, about $1.01 billion had been spent on the Turk project, including $786 million by SWEPCO for its share of the plant. The company and joint owners had an additional $436 million in contractual commitments for the plant, it said. The overall project, including engineering and related activities, is about 37% complete.

In related news, SWEPCO on June 16 began commercial operations of the 508-MW J. Lamar Stall Unit, an intermediate facility, in Shreveport, La. The unit is SWEPCO’s first combined-cycle natural gas plant. It is expected to meet additional electricity demand growth this year and beyond for SWEPCO customers in Louisiana, Arkansas, and Texas.

Sources: POWERnews, SWEPCO

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