Swepco Ratepayers Could Be on Hook for Cost of Turk Plant

by Jamie Walden  on Monday, Aug. 10, 2009 12:00 am  

PSC Chairman Paul Suskie: "If the Court of Appeals' ruling stands, I don't see how a plant can get built anywhere in the state of Arkansas, period."

Chodak said Swepco aims for energy diversity with a current portfolio of 60 percent coal plants and 40 percent natural gas facilities.

"To point to one summer where natural gas prices are low - and I'm sure they're forecasted to stay low into the future - I would urge you to go back and look at what gas prices were last year," Chodak said.

"The certainty about forecasts is that they are wrong. I don't know if they are wrong high or if they're wrong low."


Alternative Locations

Finally, the Court of Appeals cried foul at the treatment of alternative locations during the process.

"Swepco's application states that the Hempstead site was selected because it was large enough to accommodate the facility, had water supply, had nearby rail access, and had a property owner willing to sell," the appellate court wrote. "The other sites were not mentioned.

"Staff witness Clark Cotton admitted that Swepco's [environmental impact statement] did not contain a description of the comparative merits and detriments of each alternative location as required" by a section of the utility act.

Plaintiffs' attorney Nestrud agreed. "They didn't look at need and compare that to environmental impacts and to alternatives that were available. So when all that occurs, I don't agree that it's a forgone conclusion that they're going to get a certificate."

Court of Appeals Judge Josephine Linker Hart, in her concurring opinion, addressed what has become a major point of controversy in the case: why the "mostly idle" Union Power Station plant in El Dorado, owned by Entegra Power Group LLC, wasn't considered as an alternative location.

Suskie said that Entegra didn't bid on the Arkansas project and thereby fulfill certain requirements held by the Louisiana Public Service Commission. For the past 10 years, the Federal Energy Regulatory Commission has required utilities to plan by region because transmission lines cross state borders, multiple states are involved in approving a project like the Turk plant.

"The [Louisiana commission] asked for proposals to meet that need, and Entegra never bid."



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