Southwestern Electric Power Co. (SWEPCO), a subsidiary of Columbus, Ohio-based American Electric Power (AEP), has plans to close the Dolet Hills coal-fired power plant near Mansfield, La., as part of a settlement agreement approved by the Arkansas Public Service Commission in December.
The 650-megawatt Dolet Hills plant is co-owned by SWEPCO and Cleco Corp., and Dolet Hills Lignite Co., a subsidiary of SWEPCO, operates the Oxbow Mine to provide fuel for the plant. SWEPCO serves more than 536,000 customers in three states, including 119,800 customers in Arkansas.
The commission on Dec. 27 approved new base rates for SWEPCO in which an Arkansas residential customer using 1,000 kilowatt-hours per month will see an overall bill increase of about $8.43 per month, or 8.7%. Along with the new rates, the commission also approved the settlement agreement in which SWEPCO agreed to seek approval to retire the Dolet Hills Power Plant by the end of 2026.
“SWEPCO has committed to make the necessary regulatory filings at least 12 months prior to the retirement date,” said Peter Main, spokesman for SWEPCO. “Also as part of the settlement, the Sierra Club agrees to withdraw its pending challenges related to the Dolet Hills Power Plant in Texas and Louisiana. With this agreement, we continue to focus on the economic operations of the plant and lignite mine to best serve our customers. This action follows our change to seasonal operations last year as we adjust to electric power market conditions and the challenges of mining the Oxbow lignite reserves.
“The plant’s environmental performance has been exceptional for decades, operating in full compliance with applicable federal and state regulations protective of human health and the environment.”
Environmental group Sierra Club has a campaign to seek the retirement of coal-fired plants, and the closure of the Dolet Hills plant would be the 300th coal plant retirement in the group’s Beyond Coal Campaign. The campaign’s efforts have contributed to the annual prevention of 8,001 premature deaths, 12,345 heart attacks, 131,713 asthma attacks and $3.8 billion in healthcare costs, according to the Sierra Club.
“Clean solar and wind energy are now both incredibly affordable and more efficient than ever before,” said Glen Hooks, director of the Arkansas Chapter of the Sierra Club. “The Arkansas Sierra Club is proud to support a settlement that keeps Arkansas ratepayers from propping up an inefficient out-of-state coal plant. This settlement saves Arkansas ratepayers money, moves us away from dirty coal and will improve air quality in the Natural State.”
An analysis by the Sierra Club shows that the retirement of the Dolet Hills plant would save customers more than $60 million a year in electric bills, and the plant consistently costs more to operate than it generates in revenue.
In July, SWEPCO announced it will add 810 megawatts of wind energy by 2022 as part of the company’s long-term plan to increase the use of renewable energy sources, such as wind and solar. As a result of the project, wind energy will comprise 21% of SWEPCO’s energy source mix. Over the next 20 years, the mix for coal is expected to decline to 44%, from 83%, while SWEPCO increases its energy source mix of renewables and natural gas sources.
Parent company AEP has plans to add more than 8,600 megawatts of new wind and solar generation by 2030. It is seeking regulatory approval to add 1,485 megawatts of wind generation to serve customers in Arkansas, Louisiana, Oklahoma and Texas. It added 1,302 megawatts of renewable energy to its portfolio in 2019. Between 2019 and 2023, AEP plans to invest $2.2 billion in contracted renewables and renewables integrated with energy storage.