Power firm requests to build plant despite appeal of air permit
Posted on Wednesday, December 3, 2008
Southwestern Electric Power Co. asked state officials Tuesday to allow construction of a coalfired power plant in Hempstead County to continue despite the latest move by plant opponents to block the $ 1. 6 billion project.
The request before the Arkansas Pollution Control Ecology Commission came immediately after the Environmental Integrity Project — on behalf of the Sierra Club and Audubon Society — appealed an air permit issued last month by the Arkansas Department of Environmental Quality.
The appeal, filed Monday with the commission, stays the permit and halts construction on the John W. Turk Jr. facility 15 miles northeast of Texarkana, which currently employs some 427 construction workers.
Attorneys for SWEPCO argue that unless work resumes, major delays will cost the company and its ratepayers at least $ 63 million, force SWEPCO to lay off up to 377 of the construction workers, place a fiscally distressed school district in further jeopardy and ultimately raise electric rates.
“Many jobs will be lost or delayed, and families, schools and economic development in the area will be disrupted or delayed,” said Kelly McQueen, a Little Rock attorney who represents SWEPCO, in its commission filing.
But Sierra Club and Audubon contend that the air permit, acquired after a two-year process, is flawed because it neither includes the “best” nor “maximum” achievable emissions technology — a claim SWEPCO disputes.
“Both ADEQ and SWEPCO have limited their analyses to subbituminous coals when, clearly, all fuels should be con- sidered,” wrote IIan Levin, an Austin, Texas-based attorney with the project.
They also note the permit’s failure to address carbon dioxide emissions from the plant. Such emissions currently are not subject to state or federal limits, even though the Environmental Protection Agency views carbon dioxide as the most important manmade contributor to global warming.
“Both the lack of CO 2 regulation and ADEQ’s failure to even consider CO 2 risks, and the threat to human health and the environment posed by uncontrolled emissions, are issues on which petitioners seek review,” Levin said.
Full-scale construction on the 600-megawatt plant had been under way more than three weeks after state granted the air permit Nov. 5. In that time, work began on foundations for the boiler / turbine buildings, as well as excavation for underground pipes and electric conduits, SWEPCO officials said.
If work remains halted, SWEPCO will gradually begin laying off workers over two months until a 50-member skeleton crew is left, McQueen said. Without such a delay, 465 workers would be on the job in two months, 816 within six months and up to 1, 400 over the next 36 months, he said.
Costs for a minimal crew to maintain the site — along with office expenses and property taxes — is projected to exceed $ 14. 1 million over a four-month delay and $ 1. 1 million for each month afterward, McQueen said.
In addition, SWEPCO estimates it would have to pay an additional $ 48. 9 million to buy replacement power on the open market for a six-month delay beyond Turk’s initial 2012 startup date.
Such a delay would bring monthly rate increases that range from 2. 3 percent for residential customers to nearly 4 percent for industrial customers. That's in addition to an estimated residential rate increase of 12. 9 percent per 1, 000 kilowatt hours of power used — from $ 77. 78 to $ 87. 79 per month — if the plant becomes operational as scheduled, SWEPCO spokesman Peter Main said.
Additional problems for SWEPCO if construction is delayed include the time it would take to hire and retrain workers, increased costs of labor and materials such as steel and copper and warranties that expire on plant equipment before it is used.
In one case, 20 large cranes have been reserved to build a 2. 5-mile rail line extension to the plant, but may not be immediately available if the project sees significant delay.
The plant’s construction is crucial to the Mineral Springs School District, which maintains a $ 4 million budget but has lost $ 1 million in revenue over the past four years, district Superintendent Max Adcock said.
In July, the state identified Mineral Springs as “fiscally distressed,” meaning it could be taken over by the state unless it completes a recovery plan.
“The construction of the Turk plant is central to that plan, because it is the only significant economic development we know of in the area,” Adcock said in an affidavit.
Projected costs for the Turk plant already have risen from $ 1. 3 billion to $ 1. 52 billion — and nearly $ 1. 6 billion when costs for three transmission lines are added.
SWEPCO has said it needs the plant to prevent a shortage of electricity to its 113, 000 Arkansas customers, as well as 340, 000 customers in Louisiana and Texas. But filings with Texas regulators earlier this year revealed that fuel prices — whether coal or natural gas is cheaper in the long run — have become a “main issue.”
The plant site, approved by Arkansas Public Service Commission in November 2007, is near one of Arkansas’ most ecologically sensitive areas. That includes 2, 000-acre Grassy Lake, which is home to alligators, migratory birds, and some of Arkansas’ last cypress swamps and stands of virgin timber.
In September, the Governor’s Commission on Global Warming recommended that no new coal-fired power plants be built in Arkansas until 2020.
But Turk represents an economic boost to supporters in southwest Arkansas, where it would generate about $ 38 million in sales- and property-tax revenue and an annual payroll of $ 9 million.
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