Electric cooperatives begin $93 million project to expand gas plant

Little Rock-based generation and transmission cooperative Arkansas Electric Cooperative Corp. (AECC) has started a $93 million project to add 100 megawatts of generation capacity to its natural gas-fired Thomas B. Fitzhugh Generation Station near Ozark.

The expansion is part of AECC’s strategy to address wholesale generation needs. AECC is the wholesale power provider for the state’s 17 electric distribution cooperatives and part of the Electric Cooperatives of Arkansas.

Construction at the existing 170-megawatt plant started in late September, and it’s expected to be completed in the fourth quarter of 2025. The project includes adding two natural gas generating units to bring the total generation capacity to 270 megawatts. The new units can also operate on fuel oil.

According to a spokeswoman, the plant has 24 employees. After the expansion is completed, two additional permanent positions will be added.

“The expansion at Fitzhugh is crucial to continue providing reliable, affordable dispatchable power to our 17 member cooperatives and, ultimately, our 1.2 million electric cooperative members,” said Vernon ‘Buddy’ Hasten, president and CEO of AECC and Arkansas Electric Cooperatives Inc. “AECC strives to be positioned to have wholesale generation resources that are not weather dependent. The investment at Fitzhugh is intended to ensure readily dispatchable energy to meet the growing demand for electricity.”

The Fitzhugh plant near Ozark was AECC’s first generating plant. It started operating in 1963 and was re-powered in 2003.

In an electric cooperatives conference this summer, Hasten said at least $2 billion in new electricity generating capacity would be needed to meet energy demand as power plants are retired and reserve margins rise. To pay for the new capacity, consumers can expect a 14% rate increase, split into four smaller increases from 2025 to 2028.

In August, AECC unveiled plans to build a 900-megawatt natural gas-fired power plant on about 100 acres in Morris County, Texas, near Naples. The construction of the $800 million plant is part of AECC’s plans to replace electricity generation lost because of the closure of two coal-fired plants.

Along with AECC and the distribution cooperatives, the Electric Cooperatives of Arkansas also includes the Arkansas Electric Cooperatives Inc., a Little Rock-based cooperative that provides services to the distribution cooperatives.