Source: American Electric Power
American Electric Power (NYSE: AEP) subsidiary Southwestern Electric Power Co. (SWEPCO) has asked the Arkansas Public Service Commission (APSC) to review the company’s plans to install environmental controls on the Flint Creek Power Plant in Gentry, Ark.
SWEPCO and Arkansas Electric Cooperative Corp. (AECC) each own 50 percent of the 528-megawatt coal-fueled power plant. SWEPCO operates the facility. As a baseload unit, Flint Creek provides power 24 hours a day. It is the only baseload power plant in Northwest Arkansas.
“To comply with new Environmental Protection Agency regulations, we must install additional environmental controls to continue operation of the Flint Creek Power Plant beyond 2015, or we must replace that generating capacity to serve Northwest Arkansas,” said Venita McCellon-Allen, SWEPCO president and chief operating officer.
“Our obligation under Arkansas law is to provide reliable service at the lowest reasonable cost to our customers. Our extensive analysis shows that retrofitting the coal-fired Flint Creek plant is the most economical and reliable choice compared to new natural gas combined cycle units or converting the existing Flint Creek unit to natural gas. Because this involves such a significant investment, we are asking the Arkansas Public Service Commission to review the plan and determine that it is in the public interest,” McCellon-Allen said.
SWEPCO and an independent consulting firm evaluated the coal plant retrofit and natural gas alternatives using a range of coal and natural gas prices, emissions allowances and the impact of carbon dioxide regulation. The analyses included compliance with immediate and longer term environmental regulations.
“We recognize that today’s historically low natural gas prices may lead to the perception that a natural gas option has to be more economic. We carefully evaluated those options. But over the long term, even with the potential cost impacts of additional future regulations factored in, the coal retrofit option was still the economic choice,” McCellon-Allen said.
To comply with multiple EPA regulations, SWEPCO would install controls for sulfur dioxide (SO2), nitrogen oxide (NOx), mercury and other hazardous air pollutants. The controls include a dry flue gas desulfurization system (DFGD), commonly known as a scrubber, to reduces SO2 emissions; low NOx burners (LNB) and overfire air (OFA) to reduce NOx emissions; activated carbon injection (ACI) to reduce mercury emissions; and a fabric filter, commonly known as a baghouse, to filter particulate matter. Current plans are to have the equipment in place and operating by June 2016. (SWEPCO would have a one-year extension beyond 2015 to continue operations if it is in the process of installing controls.)
The estimated cost of the project is $408 million. SWEPCO’s 50 percent share is $204 million.
The estimated cost impact for SWEPCO’s Arkansas customers would be an increase of approximately $2.97 per month, or 3.85 percent for a residential customer using 1,000 kWh per month, beginning in 2017. For commercial customers, the increase would be approximately 3.87 percent.
“The filing at the APSC is not required for this type of project, but SWEPCO believes it is important for the Commission to see a full analysis and have the opportunity to reach its own conclusion as to whether it is in the public interest for SWEPCO to proceed with the retrofit,” McCellon-Allen said. A Certificate of Environmental Compatibility and Public Need (CECPN) or Certificate of Convenience and Necessity (CCN) are not required for the project. SWEPCO would obtain the appropriate environmental permits.
Because of the time constraints for compliance with the retrofit or replacement of the capacity, SWEPCO is asking the APSC to establish a procedural schedule that would permit an order to be issued by the end of 2012. Pending the APSC’s decision and approval of environmental permits, construction would begin in January 2014 with completion by June 2016.
Flint Creek Power Plant was placed in service in 1978.