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SWEPCO seeks reversal of Arkansas Court of Appeals ruling July 2, 2009 - No reporter cited

Jim Pinson
Editor

SHREVEPORT - Southwestern Electric Power Company (SWEPCO) held a press conference Monday afternoon in Little Rock to announce that they would seek a reversal of the Arkansas Court of Appeals ruling with the Arkansas Supreme Court.

SWEPCO President and COO Paul Chodak stated that SWEPCO had asked the Arkansas Supreme Court to review the Court of Appeals ruling from Wednesday, June 24, that overturned the Arkansas Public Service Commission’s decision to grant a Certification of Environmental Compatibility and Public Need for the construction of the John W. Turk Jr. Power Plant at Fulton. The CECPN was granted to SWEPCO in 2007, following a 17-day hearing. The CECPN is legal authorization granted by the state of Arkansas to a regulated utility to construct a power plant or transmission facilities and is only issued after public and formal review by the state and interested stakeholders.

Chodak stated that the ruling was “not based on the merits of the Turk Plant, but on a new legal interpretation of the process that the APSC should use to approve power plants.”

The APSC and the Public Service Commissions of Texas and Louisiana approved the CECPN and agreed that the Turk Plant was the best option for SWEPCO’s customers.

Chodak stated that the appellant court decision sought to reverse 30 years of practices and procedures that had been used to approve the construction of power plants. He stated that the ruling “lengthened the approval process” and “made business in Arkansas more difficult.”

“Since the court’s decision was announced, we have heard clear support from many stakeholders - including community leaders, business and economic development groups and elected officials - who want to see the plant completed,” Chodak said. “They realize its importance to individual customers and to the health of the state’s economy.”

“I think it’s just a travesty,” Mineral Springs Superintendent Max Adcock said Wednesday afternoon about the ruling against the permit. “It’s a sad state of affairs when law suits can stop something that’s positive for this area.”

Adcock and the Mineral Springs School District have supported the power plant since 2007.

SWEPCO reported that their customers were using 22 percent more power today than they did 10 years ago. To provide the extra power, SWEPCO is currently purchasing electricity at a premium instead of being able to produce the electricity that their customers need.

Chodak stated that the ruling by the Court of Appeals puts the Turk Project in jeopardy and will effect what customers pay every month for electricity.
SWEPCO has spent $713 million on the construction of the Turk plant, and a total of $1.3 billion has been committed to the project. Chodak reported that 90 percent of the major equipment of the plant has been purchased.

“It would cost even more to stop construction and then restart it,” Chodak said. “These costs have been prudently incurred under an order of the Arkansas Public Service Commission,” Chodak said. “The longer it takes for construction, the longer it takes for customers to get an additional power resource and the more it will cost customers in the long run.”

Chodak stated that if the project were killed by the decision of the appalantcourt that Arkansas would lose well over 1,000 construction jobs. Currently, Turk employs 723 people. About 400 of those employees are residents of Hempstead and the surrounding Arkansas counties. SWEPCO estimates that the weekly payroll is $3 million.

SWEPCO plans to employ 110 permanent jobs when the construction is completed. Those 110 jobs will provide $4.6 million in annual payroll. Turk will also provide $3.9 million in school and property tax revenues.

SWEPCO is also working to construct a 508-megawatt combined-cycle; natural gas-fueled Stall Unit in Shreveport, La. The Stall Unit is scheduled for completion in 2010. They have completed a 340-megawatt simple-cycle; natural gas-fueled Mattison Plant in Tontitown. It was completed in 2007.

“Together, these three plants will allow SWEPCO to continue the fuel diversity that has resulted in some of the lowest electricity prices in the region for many years,” Chodak said. For example, SWEPCO’s average residential rate is 13.8 percent lower than the Arkansas state average and 31.3 percent lower than the national average.

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