AG protests Entergy pact to shutdown Arkansas coal plants, asks state regulators to intervene

Just weeks after an agreement between Entergy Arkansas and a coalition of environmental groups was reached to shut down two of the state’s oldest coal-fired power plants, state Arkansas Attorney General Leslie Rutledge on Thursday (Dec. 13) asked state regulators to delay or halt that historic pact.

In a surprise announcement following recent news that the U.S. coal industry is rapidly declining, Rutledge said she has asked the Arkansas Public Service Commission (PSC) to review a pending settlement agreement between Entergy Arkansas LLC, the Sierra Club and the National Parks Conservation Association to shut down the utility’s two coal-fired power plants near Redfield and Batesville.

Rutledge stressed that the Nov. 16 settlement agreement to speed up the closing of power plants that Entergy Arkansas co-owns with Arkansas Electric Cooperative Corp. and a number of municipally-owned electric utilities could raise rates and affect service for over 1.2 million Arkansans.

The Republican AG also said she has petitioned the U.S. District Court for the Eastern District of Arkansas to intervene in the case to protect the interest of Arkansas ratepayers and inform the federal court that Entergy’s actions should first be reviewed by state regulatory authorities.

“This settlement has not been properly vetted by the (PSC), my office or other agencies that have the public’s interest at heart. Because of the potential negative impacts on Arkansas citizens and businesses, I am seeking an investigation by Entergy’s state regulator, the PSC, and intervention in federal court to ensure that the State’s interest and those of its citizens and businesses are adequately protected,” Rutledge said in a statement.

ENTERGY ARKANSAS: DEAL IS IN OUR ‘BEST ECONOMIC INTEREST’
After hearing of Rutledge’s claims Thursday evening, Entergy Arkansas officials countered that the Nov. 16 settlement “is in the best economic interest of our customers, our employees, our community and the company.”

“It allows us to move forward with plans to replace these older generating plants with newer, highly efficient generation resources without incurring the expense of potentially adding scrubbers to the plants at the cost of $1 billion each. The settlement also allows us to put an end to costly ongoing lawsuits over the use of coal at the plants,” said Entergy Arkansas spokeswoman Kerri Jackson Case.

“We do not believe it would be a wise investment or in the best interest of our customers to sink $2 billion into almost 50-year old plants. Customers are best served with an orderly transition and investment in new, more cost-efficient technology,” said Case. “Any costs related to new investments to replace the generation of these plants is required to be reviewed by the (PSC) at the time it is proposed.”

Under the agreement fashioned last month, Entergy Arkansas plans to end the use of coal at its sprawling White Bluff and Independence power plants in Jefferson and Independence counties, respectively. The White Bluff plant is expected to close by 2028, while the Independence Steam Electric Station will be shut down two years later.

The state’s largest utility would also retire its Lake Catherine natural gas-powered facility by 2027. Both Independence and White Bluff came online in the early 1980s. The Lake Catherine facility was first commissioned in 1950, but later updated in 1970.

The Arkansas subsidiary of New Orleans-based Entergy Corp. has also said it will go before the PSC by 2022 to seek approval of 800 megawatts of renewable generating sources. By 2027, Entergy Arkansas said it also will ask state regulators to approve another 400 megawatts of renewable power, including 181 megawatts of solar power already in the utility’s Arkansas portfolio.

Besides the shutdown of the state’s coal-fired fleet, the settlement pact will also allow Entergy Arkansas and other Entergy Corp. affiliated subsidiaries and sister companies to settle a longstanding federal lawsuit with the Sierra Club and the National Parks Conservation. The pact also resolves multiple other challenges to federal and state Clean Air Act regulations intended to protect the air in national parks, wilderness areas and wildlife refuges across Arkansas and surrounding states.

In the original lawsuit filed in the U.S. District Court in Little Rock, the Sierra Club and other groups alleged that Entergy illegally modified the White Bluff and Independence plants without a permit, in violation of the U.S. Environmental Protection Agency’s (EPA) Clean Air Act.

Rutledge’s federal court filing and petition to Arkansas regulators predictably re-ignited a long-standing public feud with the Sierra Club going back to environmental group’s support of former President Barack Obama’s Clean Power Plan (CPP), which the Trump administration repealed in August and replaced with a more business-friendly approach that is supportive of the coal industry.

One week before the Entergy settlement with the Sierra Club was announced in early November, Rutledge joined a 21-state bipartisan coalition in support of President Donald Trump’s proposed replacement of the CPP.

“The Obama-era Clean Power Plan was illegal and ignored concerns from the states about anticipated skyrocketing rate increases,” Rutledge said on Nov. 8. “President Trump’s Affordable Clean Energy rule returns power to the states by allowing each state to determine the best course of action for its own citizens, rather than a one-size-fits-all mandate from the federal government.”

RUTLEDGE ‘MISGUIDED,’ SIERRA CLUB SAYS
Glen Hooks, the longtime director of the Arkansas chapter of the Sierra Club, called Rutledge’s announcement “another misguided attempt to thwart clean air protections for Arkansans.”

“Our settlement with Entergy Arkansas responsibly transitions two of the largest and dirtiest unscrubbed power plants in the nation to retirement, while also committing to hundreds of megawatts of clean energy for our state. This settlement will mean cleaner air and more clean energy jobs right here in Arkansas,“ said Hooks. “The Sierra Club urges Attorney General Rutledge to embrace Arkansas’ clean energy future. We need state leaders who will stand up for progress in Arkansas–not stand in the way.”

Nearly two years ago, the EPA released a final draft of its plan to help Arkansas and Missouri meet Clean Air Act requirements to cut about 68,500 tons of dirty sulphur dioxide emissions per year and 15,100 tons of smog-like nitrogen dioxide per year. That plan was meant to better protect national parks and refuge areas from hazy conditions, and provide other health and environmental benefits.

That proposal, however, rejected a portion of the state Department of Environmental Quality’s (ADEQ) haze plan, called Best Available Retrofit Technology, or BART. The proposed federal guidelines also addressed “downwind” haze problems from the Entergy power plants and factories that cross state lines.

ADEQ recently received notice from the EPA announcing approval of its Regional Haze state plan that replaces federal requirements at Entergy White Bluff, Independence, and Lake Catherine facilities. The state plan was the result of months of legal review and consultation with stakeholders, including the facilities within the state’s electric generating fleet. A spokesperson for ADEQ said the agency was not involved or consulted on the proposed terms of the Entergy-Sierra Club settlement agreement and that the issues in the complaint are not related to the regional haze program.

Rutledge’s protest of the Entergy-Sierra Club settlement agreement today follows recent efforts by the Trump administration to back “clean coal” initiatives in support of the fossil fuel industry. However, several utility giants such as AEP, Southern Company and Xcel have all announced plans similar to Entergy to mothballed or shutter dozens of aging coal, nuclear and older natural gas-generation power stations across the U.S.

Just last week, the U.S. Energy Information Administration said in 2018 that U.S. coal consumption in the power sector had fallen to its lowest level in 40 years. And only one, relatively small, new coal-fired generator with a capacity of 17 megawatts is expected to come online by the end of 2019, despite the EPA’s laxer guidelines.