SWEPCO won't seek Ark. PSC approval for plant

SWEPCO says it won't seek Arkansas PSC approval for coal-fired plant in Hempstead County

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LITTLE ROCK, Ark. (AP) -- Southwestern Electric Power Co. said Thursday it will no longer seek Arkansas approval of its planned coal-fired plant in Hempstead County, meaning it will move forward with the facility that's been tangled in court cases for years but will send the power out of state.

The utility's plans to build the John W. Turk Jr. Power Plant near Fulton stalled after the Arkansas Supreme Court ruled that SWEPCO didn't go through the proper permitting process, sending the case back to the Arkansas Public Service Commission.

SWEPCO said the plant will still be built in Arkansas but will instead serve customers in Louisiana and Texas, where it has received regulatory approval.

"We will secure other markets for the 88 megawatts of Turk plant capacity that would have served our Arkansas retail customers," said Michael G. Morris, chairman, president and CEO of American Electric Power Co., SWEPCO's parent company.

The decision comes as the Arkansas Supreme Court ruled Thursday that it wouldn't reconsider the case.

"While we are certainly disappointed in the decision, we respect the opinion of the court," said Venita McCellon-Allen, SWEPCO's president and chief operating officer. "Without the (permit), we are turning to another option available to SWEPCO under Arkansas law."

Several facilities in Arkansas operate as so-called "merchant plants." Doing so allows utilities to build without Public Service Commission approval, but they can't recover their costs through commission-approved rates. Instead, power is sold wholesale or in out-of-state markets.

"When it's a merchant plant, it's a free market and we have no jurisdiction over it," said Paul Suskie, chairman of the Public Service Commission.

For example, the Plum Point Power Plant, which is also coal-fired, will go online soon near Osceola and operate as a merchant plant.

Environmentalists objected to SWEPCO's plant in Hempstead County, arguing that proper assessments of the plant's effect on valuable wetlands were never done. A case remains pending in federal court, but construction of the $1.7 billion plant is continuing.

SWEPCO, a subsidiary of Ohio-based American Electric Power, has 464,000 customers in Arkansas, Louisiana and Texas.