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Texas regulators should reject SWEPCO coal plant, judge says Tuesday, Jan 22, 2008 By John Lyon Arkansas News Bureau LITTLE ROCK - An administrative law judge has recommended that the Texas Public Utilities Commission reject Southwestern Electric Power Company's proposal for a coal-fired power plant in Southwest Arkansas, saying the company failed to show a need for the plant. SWEPCO received approval for the plant from the Arkansas Public Service Commission in November, but the company also needs approval from the Arkansas Department of Environmental Quality and regulators in Texas and Louisiana, where many of its customers live. In her recommendation, filed Thursday with the Texas Public Utilities Commission, Administrative Law Judge Wendy Harvel wrote that "SWEPCO failed to prove that there is a need for the plant" and therefore the company's application for a certificate of convenience and necessity should be denied. SWEPCO spokesman Scott McCloud said Monday the company was disappointed in Harvel's proposal for decision. "But SWEPCO continues to believe that the Turk plant is the best solution for meeting the long-term electricity needs of our Texas customers," McCloud said. SWEPCO has said it will build the plant with or without a certificate from Texas regulators. The Texas commission is scheduled to consider Harvel's recommendation in a meeting at its offices on Feb. 22 in Austin. Harvel wrote that the $1.3 billion, 600-megawatt John W. Turk Jr. Power Plant, which SWEPCO wants to build near Fulton in Hempstead County, would serve 167,000 retail customers in Texas. SWEPCO's Texas customers would face at least a 33 percent increase in their base rate to help pay for construction of the plant - and possibly more because of construction delays, Harvel noted. In calculating its future needs, SWEPCO erroneously included both retail and wholesale customers, according to Harvel. "Because SWEPCO's serving wholesale customers is entirely voluntary, the ALJ finds that the wholesale customers' load should not be included when determining SWEPCO's projected demand," she wrote. "The wholesale customers could, whether the Turk Plant is constructed or not, choose at the end of the contract term to purchase power from another source. Or if they chose to continue to purchase from SWEPCO, they would be free to renegotiate the terms of the contract." If wholesale customers are removed from the calculations, SWEPCO "has not met its burden to show that it has a need for additional generating," Harvel advised the commission. She also noted that the Public Utilities Commission's staff and Texas Industrial Energies Consumers oppose SWEPCO's application. The Arkansas Public Service Commission voted 2-1 on Nov. 21 to grant a certificate of public need to SWEPCO, after weeks of hearings on the proposed plant. A petition by opponents for a rehearing was denied in December. The commission's approval of the application came with several conditions, including a requirement that SWEPCO agree not to increase Arkansas customers rates' as a result of disapproval by regulators in Texas or Louisiana. Hunting clubs, environmental groups and some area landowners argued at the hearings in Little Rock that the plant would harm the local environment and that alternative power sources are preferable to coal. SWEPCO said new technology would keep pollution to a minimum and argued that coal makes more economic sense than any other power source. In her recommendation to Texas regulators, Harvel wrote that the plant would have no negative environmental impact on Texas and that "SWEPCO properly considered alternatives to the Turk Plant." |
