SWEPCO plans for coal plant retirements, renewable energy capacity additions

Southwestern Electric Power Co. (SWEPCO), a utility of Columbus, Ohio-based American Electric Power (AEP), recently released its Integrated Resource Plan that included timelines for coal plant retirements and renewable energy capacity additions. However, they aren’t happening soon enough, according to environmental group Sierra Club.

Sierra Club took issue with several elements of the plan, including SWEPCO’s decision to continue to operate coal-fired Flint Creek Power Plant until 2038 without providing an economic analysis of retiring it. However, the group noted SWEPCO removed plans to build a natural gas-fired plant from the draft plan.

“SWEPCO’s plan lacks the type of thorough economic analysis that could have found cost savings in retiring its coal plants and adding solar resources faster,” said Josh Smith, staff attorney for Sierra Club. “It’s disappointing that SWEPCO refused to study the economics of retiring Flint Creek more quickly and simply assumes without justification that customers should pay for this plant through 2038. SWEPCO needs to change course at Flint Creek soon and avoid wasting further customer money on this plant. Sierra Club will urge regulators to stop issuing blank checks for SWEPCO’s wasteful spending at Flint Creek. The good news is that SWEPCO plans to add a large amount of wind energy while we’ll continue to compel the utility to add solar and storage resources sooner.”

In response, SWEPCO spokesman Peter Main explained that “the 516-megawatt plant in Gentry is an essential part of the Northwest Arkansas power grid with ongoing upgrades that comply with stringent federal environment regulations.” Main also said SWEPCO completed “an analysis to compare the merits of retiring Flint Creek in 2028 versus retrofitting the plant to comply with recent regulations and operate through its original retirement date of 2038.” The analysis was completed to support its compliance plans filed with the U.S. Environmental Protection Agency in November 2020.

“Along with Flint Creek, SWEPCO’s IRP includes the addition of 4,000 megawatts of solar energy and 2,450 megawatts of wind in a resource mix that continues our move toward more renewable energy and ensures reliability and affordability for our customers,” Main added.

The Integrated Resource Plan provides a 20-year energy portfolio outlook and must be submitted to the Arkansas Public Service Commission every three years. “SWEPCO has selected a plan that balances the key factors of customer affordability, rate stability, maintaining reliability and sustainability,” Main said. The report shows how the company plans to meet the four objectives over the 20-year planning period.

According to the plan, the company will need new capacity in 2023 as a result of the retirement of its coal-fired Pirkey 1 plant. The need expands in 2028 and 2030 with the planned retirements of SWEPCO’s coal-fired Welsh plant and natural gas-fired Wilkes plant, respectively. The Welsh plant will be converted to run on natural gas in 2028 and operate through 2037. On Dec. 2, SWEPCO decided to delay the planned retirement of the natural gas-fired Lieberman plant units No. 3 and No. 4 from December 2022 and December 2024, respectively, to no later than Dec. 31, 2026.

According to the U.S. Energy Information Administration (EIA), coal plant operators plan to retire 28%, or 59 gigawatts, of the coal-fired electricity generating capacity currently operating in the United States by 2035. As of September, 212 gigawatts of the capacity were in operation. The average age for coal-fired plants operating in the United States is 45 years old. As of September, no plans have been posted to install new coal-fired power plants in the United States.

By 2041, SWEPCO plans to add 4,000 megawatts of new solar and 2,450 megawatts of new wind generation capacity. Over the next five years, SWEPCO plans to add 550 megawatts of solar capacity. The majority of the new additions in solar capacity will be made from 2027-2033 after solar costs are expected to fall and the capacity need rises. Also, SWEPCO expects to add 2,160 megawatts of natural gas-fired capacity between 2036 and 2040 as the Welsh plant is retired along with the coal-fired Flint Creek plant and the Wilkes plant.

From 2023 to 2024, between 270 and 280 megawatts of short-term capacity purchases will be made as new resources are phased into the portfolio. However, the amount of purchases is expected to be re-evaluated as a result of the decision to delay the Lieberman plant retirements.

Over the next 20 years, SWEPCO expects customer count to increase by 0.2% per year. Retail sales are projected to grow by the same amount over that period as stronger growth from the residential and industrial sectors offsets a decline in commercial sales.

By 2030, the utility expects to reduce emissions by 80% compared to its 2000 baseline, consistent with the goals of parent company AEP. SWEPCO also expects to reduce NOx emissions by 85% and SO2 emissions by 96% over the next decade.

Shreveport, La.-based SWEPCO serves 543,000 customers in three states, including 123,000 in Arkansas.