PSC approves Flint Creek power plant work

by The City Wire staff ([email protected]) 277 views 

The Arkansas Public Service Commission on Wednesday (July 10) approved a $408 million plan to add environmental protection equipment to the Flint Creek Power Plant near Gentry, Ark., that could increase plant jobs by up to 30.

Estimated customer rate increases of just under 4% could begin in 2017.

Flint Creek is 50% owned by Southwestern Electric Power Co. (SWEPCO), a subsidiary of Columbus, Ohio-based American Electric Power. The other half of the operation is owned by the Arkansas Electric Cooperative Corp. (AECC).

Completed in 1978, Flint Creek is a single-unit 528 MW baseload coal-fired steam electric generating plant that provides power 24 hours a day. It is the only baseload power plant in Northwest Arkansas.

New Environmental Protection Agency regulations required SWEPCO and AECC to equip the plant with “additional environmental controls” to continue plant operation beyond April 16, 2016, according to a SWEPCO release.

Flint Creek has 69 employees and an annual payroll of $3.9 million, according to SWEPCO. The project will create approximately 300 construction jobs at peak and 20 to 30 permanent jobs to operate the new equipment.

If environmental permits are approved, construction is set to begin January 2014. The equipment is to control or reduce emissions of sulfur dioxide, nitrogen oxide, mercury and other air pollutants.

According to the Public Service Commission (PSC) document, SWEPCO reviewed three options for replacing the existing power generation equipment at Flint Creek instead of installing equipment to the existing coal-fired operation.
• Converting to a natural gas-fired plant.
• Building on-site a natural gas combined cycle plant.
• Building elsewhere in the Southwest Power Pool region a new natural gas combined cycle plant.

SWEPCO and AECC officials said natural gas conversion would have required construction of “one or more expensive gas pipelines” to the facility.

The Sierra Club opposed renovations to the coal-fired generation plant. Sierra Club officials said SWEPCO never “satisfied its burden of establishing that retrofit of Flint Creek is in the public interest.” The PSC documents notes that Sierra Club officials “asserted that the record ‘shows that there are less expensive ways to provide power to SWEPCO’s ratepayers, and SWEPCO has not shown that Flint Creek is needed for reliability of the transmission system.’”

But after reviewing documents and testimony from several hearings, Commissioners Collette Honorable, Olan Reeves, and Elana Wills approved the plant renovations.

Their conclusion noted: “Having carefully considered and weighed all of the evidence presented by the Parties in this proceeding, the Commission finds that there is substantial evidence of record, from both a cost and reliability perspective, which supports the installation of the required EPA environmental controls at Flint Creek so that Flint Creek can continue to be operated as a baseload electric generation plant in the Northwest Arkansas area.”

SWEPCO estimates a potential rate increase of approximately $2.97, or 3.85%, for SWEPCO’s residential Arkansas customers (based on average use of 1,000 Kwh per month) beginning in 2017. The potential commercial rate increase is estimated at 3.87%.

A rate recovery for installation costs have yet to be determined by the PSC.

Venita McCellon-Allen, SWEPCO president and CEO, praised the decision.

“The Commission’s decision recognizes the importance of Flint Creek as a base load power plant for Northwest Arkansas,” McCellon-Allen noted in the SWEPCO statement. “It also reflects a place for coal in Arkansas’ energy future, continuing SWEPCO’s strategy of fuel diversity that avoids over-reliance on any one fuel to provide greater fuel cost stability for our customers.”

SWEPCO has 520,400 retail customers in three states, including 113,700 in western Arkansas, 225,700 in northwest and central Louisiana and 181,000 in north and eastern Texas.

Flint Creek co-owner AECC provides wholesale electricity to Arkansas’ 17 electric distribution cooperatives. The cooperatives serve almost 500,000 members in Arkansas.