Electric Utilities Power Up, Don’t Forsee Cost Spike

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Consumers have become accustomed to rising energy costs, which should make better service and lower prices on electricity welcome news for Northwest Arkansas on the eve of summer.
While the industry nervously watches the hurricane season with an eye toward petroleum and natural gas prices, heavy spring rains in the state and improved local generation infrastructure should give Northwest Arkansas customers a break from the heat and higher bills.
Last summer was a blistering one in Arkansas and the rest of the nation. The strain on the grid in the northwest corner of the state caused Southwestern Electric Power Co., which serves more than 110,000 customers in Arkansas, to issue several public appeals for conservation.
So did the Ozarks Electric Cooperative Co., which serves more than 50,000 customers in the area, and the two companies have teamed on projects that will come online this summer capable of generating an additional 220 megawatts for Northwest Arkansas.
SWEPCO is working on a 480-megawatt station near Tontitown and 160 megawatts should be energized in July. A new station in Elkins will be able to generate another 60 megawatts.
One megawatt typically can serve about 1,000 homes. The area’s residential and commercial users have a projected demand of about 1,300 to 1,350 megawatts and only around 500 megawatts are generated locally at the Arkansas Electric Cooperative Co. Flint Creek station near Gentry.
“That is a lot of power to import from other areas via transmission lines,” said Ozarks Electric vice president of engineering and operations Troy Scarbrough. “Those lines get overloaded and you can have times where a transmission line can sag as much as 12 feet from normal because of the temperature change due to the thermal load on the conductors.”
As a coop, Ozarks Electric purchases its fuel from the AECC system, which generates the hydroelectric power Ozarks Electric buys from stations in Morrilton, Dumas and Barling.
Scarbrough said the area received transmission reserve warnings on a “double digit” number of days last summer and were encouraged to ask large commercial users to curtail usage.
Last year’s drought kept the stations from operating at full capacity and along with the increased demand, drove up the cost of electricity.
“We expect [no rate increases] through the rest of the year,” Ozarks Electric spokesperson Penny Storms said. “We could see some moderate decline.”
Ozarks Electric, a nonprofit provider which returned $1.2 million in revenue to customers at the end of the year, and Columbus, Ohio-based American Electric Power (of which SWEPCO is a part) are nearing completion of the $30 million, natural gas-fired combustion turbine system outside Elkins that will be complete in late July or early August.
There have been some delays on the supplier side and the site is still without the three portable, 20-megawatt generators. Scarbrough said the Elkins station is a stopgap measure for the next 3 to 5 years.
Ozarks Electric also recently completed a $2 million upgrade to its Carley Road substation in Springdale to better serve Tyson Food’s headquarters and the growing neighborhoods in Johnson between US 71 Business and Interstate 540.