Coal-fired power plant in Arkansas settles lawsuits

Southwestern Electric Power Co. (SWEPCO), a unit of American Electric Power (NYSE: AEP), said it settled lawsuits against the $2.1 billion, 600 MW John Turk coal-fired power plant in Arkansas.

Under terms of the settlement, the litigants are withdrawing all of their challenges to the plant, including the air permit and the U.S.Army Corps of Engineers permit. In return, SWEPCO agreed not to build any new generation units at the site or propose any new coal-fired power plants within 30 miles of the Turk plant. SWEPCO also agreed to comply with the U.S. Environmental Protection Agency’s Cross State Air Pollution Rule. It agreed to install carbon capture and storage technology at the plant if economically feasible and if the costs can be recovered through electric rates.

A stipulation of dismissal will be filed with the U.S. District Court for the Western District of Arkansas in Texarkana. The settlement resolves all issues raised by these plaintiffs in their challenges to the U.S. Army Corps of Engineers Section 404 permit. Additional filings will be made to withdraw the air permit appeal and terminate other cases.

The Sierra Club and the National Audubon Society/Audubon Arkansas were not part of the settlement and continue to challenge the air permit before the Arkansas Court of Appeals and the Corps permit in a companion case pending before the U.S. District Court in Texarkana.

The settlement follows a federal appeals court ruling that upheld a ruling temporarily blocking construction work on part of the plant, which is about 70 percent complete.

The Turk plant is scheduled to begin operations in 2012.

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