Gas plant cheaper than coal, panel told
Posted on Thursday, September 13, 2007
It would be less expensive for Southwestern Electric Power Co. to build and operate a natural gas power plant than a coal-fired plant in Hempstead County, a consultant hired by the Arkansas Public Service Commission staff testified Wednesday.
David Schlissel, a senior consultant for Synapse Energy Economics Inc. in Cambridge, Mass., conducted studies comparing the cost of the two sources of electric generation for a plant, using data supplied by SWEPCO.
“My conclusion is that the natural gas alternative has a lower present value cost than the [proposed ] Hempstead [coal-fired ] plant,” Schlissel told Rick Addison, a Dallas attorney representing opponents of the plant.
Schlissel said he took into account the cost of building and operating each type of plant. He also said he considered costs throughout SWEPCO’s entire system and applied them to the two scenarios.
Schlissel’s testimony about the cost of the plant contradicted that of three SWEPCO witnesses — Judah Rose, Scott Weaver and Bruce Braine — who indicated that a natural gas plant would be more expensive.
SWEPCO is seeking to build a $ 1. 4 billion, 600-megawatt coal-fired power plant about 15 miles northeast of Texarkana. SWEPCO has about 450, 000 customers in Texas, Louisiana and Arkansas. About 111, 000 SWEPCO customers are in Arkansas.
Some landowners in the vicinity oppose what would be known as the John W. Turk Jr. Power Plant, contending that mercury emissions, coal dust and other environmental concerns will affect their property. Their property includes an area known as Grassy Lake, which has thousands of acres of cypress swamp and breeding grounds for thousands of water birds, many that are rare. Witnesses representing the landowners and SWEPCO have described the area as “the gem of Arkansas ’ natural areas.”
Generally, a new natural-gas plant likely would emit less pollutants than a coal plant, but some believe the volatility of natural gas prices make a natural gas plant riskier and costlier to build and operate.
Schlissel said the computer model he used allows for the input of several alternatives for various costs and creates more than 275 options, ranked from the least expensive to the most expensive.
Yancey Reynolds, a hunting club member and a Realtor who lives at Grassy Lake, said Wednesday that if the plant is built, he would prefer that transmission lines from the facility run south of the plant and follow Interstate 30 south. SWEPCO has proposed placing transmission lines along the right-of-way of an existing rail line that is on the southern border of the landowners property.
The commission already has decided that SWEPCO, a Shreveport, La., subsidiary of American Electric Power Co., has a need for the additional electric capacity, but it still must approve the plant.
Testimony is scheduled to conclude today in the hearing, but the commission plans to tour the Grassy Lake site next week. Closing arguments by both sides will be made sometime after that. The commission has 60 days after the case is closed to make its decision.
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