OG&E to submit plan to reduce coal-fired power to Arkansas, Oklahoma regulators

Oklahoma Gas & Electric, which has more than 800,000 customers in Oklahoma and western Arkansas, is joining Entergy Corp. and other top U.S. regulated utilities in announcing new strategic plans to reduce coal use, lower carbon emissions and offer cleaner renewable energy options across its two-state footprint.

Last week, the Oklahoma City-based utility announced that, pending approval from Oklahoma regulators and the Arkansas Public Service Commission (PSC), it will pay $53 million to acquire the Shady Point plant near Poteau, Okla., and the Oklahoma Cogeneration plant in Oklahoma City. OG&E Chairman and CEO Sean Trauschke said the two acquisitions will help the Oklahoma utility meet the growing needs of its customers and to replace capacity currently provided by power purchase contracts set to expire in 2019.

“In the past five years, we’ve completed several critical projects that advance our commitment to deliver energy reliably and affordably to customers in an environmentally responsible way. Today’s announcement builds on that commitment,” said Trauschke. “Our diverse energy portfolio of natural gas, wind, solar and coal gives us the versatility to meet a variety of economic and environmental needs. The result is our electric rates are 29% below the national average, which is a driver of economic development, and OG&E is among industry leaders in emissions reduction performance. Many of our peer companies will not match our level of emissions reduction for years, if not a decade or more.”

The Shady Point facility, currently owned by AES Corp., is a 360MW coal- and natural gas-fired plant that produces lower emissions due to its design features and emissions controls. The Oklahoma City power plant, owned by Oklahoma Cogeneration LLC, is a 146MW natural gas-fired combined-cycle plant.

Trauschke said as the Oklahoma utility begins 2019, it expects power plant emissions to be significantly lower from 2005 levels. Altogether, sulfur dioxide emissions will be lower by nearly 90%, nitrogen oxide will be lower by nearly 75% and carbon dioxide (CO2) will be lower by approximately 40%, he said.

The OG&E’s lower emissions are largely attributed to the company’s actions to meet federal regional haze mandates, which require states to meet Clean Air Act requirements to cut smog-like nitrogen dioxide emissions and the harmful effects of pollution across national parks and other environmentally sensitive wilderness areas.

Under OG&E’s regional haze plan filed with the Environmental Protection Agency (EPA), the utility will convert two units at the company’s Muskogee Power Plant in eastern Oklahoma, about an hour from Fort Smith, from coal to natural gas.

That plan also includes adding two, emissions-reducing scrubbers to coal-fired units at its Sooner Power Plant and modifying burners at several of the company’s generation plants. Once the company integrates Shady Point into its fleet, it will change how the plant operates and further lower emissions, said Trauschke.

“We expect operational changes to reduce coal use by more than 50% initially, and we’ll continue to explore opportunities to reduce costs and emissions not only at Shady Point, but also systemwide,” said the OG&E chief executive.

OG&E’s announcements come only a month after Entergy Arkansas announced a historic pact on Nov. 16 to shut down two of the state’s oldest coal-fired power plants and seek approval from the PSC to switch over to cleaner renewable energy options such as wind and solar power and cheaper natural gas. That plan must be approved by the state PSC and the U.S. District Court in Little Rock to assuage a federal lawsuit by the Sierra Club and other environmental groups.

Since then, Arkansas Attorney General Leslie Rutledge has asked federal court officials and the PSC to review the state’s largest electric utility’s pending settlement agreement, saying she wants to protect the interest of Arkansas ratepayers from any costs associated with the shutdown of the utility’s coal-fired fleet and switch to a cleaner energy portfolio.