SWEPCO appeals plant OK's reversal

Justices asked to review Turk-permit ruling

By Bill W. Hornaday

Photo by Karen E. Segrave

Paul Chodak, president and chief operating officer of Southwestern Electric Power Co., makes a point during a news conference Monday in Little Rock.

ADVERSTISMENT

LITTLE ROCK — Southwestern Electric Power Co. on Monday asked the Arkansas Supreme Court to review an appeals court decision that reversed approval of the coal-fired John W. Turk Jr. power plant.

SWEPCO President and Chief Operating Officer Paul Chodak acknowledged at a news conference that the ruling puts the $2.1 billion project "in jeopardy."

The Arkansas Court of Appeals ruled Wednesday that state regulators misapplied "plain language" law that requires new plants and related facilities such as power lines to be reviewed in the same proceeding.

The decision was a victory for Turk opponents such as the Hempstead County Hunting Club, the Sierra Club and Audubon Arkansas, which have sued in state and federal court to halt construction at the site 15 miles northeast of Texarkana.

Chodak said Monday that it is the Shreveport-based utility's customers - and southwest Arkansas' economy - that will ultimately lose if the project dies.

So far, more than $713 million has been spent on Turk, with SWEPCO committed to $1.3 billion in signed contracts, Chodak said. More than 700 tons of steel have been assembled so far, as well as 72,000 cubic yards of concrete - enough to fill 78,300 standard-size refrigerators, he said.

SWEPCO currently pays more money to buy electricity on the open market than it would cost Turk to produce, Chodak said. SWEPCO's 113,500 customers in Arkansas use 22 percent more electricity now than in 1999, he said.

"Last week's opinion by the Arkansas Court of Appeals puts the entire project in jeopardy and will affect what you pay every month for electricity," said Chodak during the news conference at the Arkansas State Chamber of Commerce in Little Rock. He later said costs passed to ratepayers are decided by the Arkansas Public Service Commission, whose approval of Turk in November 2007 was rejected by the appeals court.

For the "near term," SWEPCO is pressing forward with Turk, Chodak said.

Work continues in Hempstead County as some of the 732 workers now at the 3,042-acre plant site prepare to install air vents and pour concrete for its smokestack.

Chodak said there are no guarantees of what SWEPCO may do if the Arkansas Supreme Court declines to review the appeal.

If that occurs - or the Supreme Court upholds the appeals decision - SWEPCO would face reapplying for Turk's approval by the commission, with all matters related to the plant covered in the same proceedings.

The appeals court ruled that the commission exceeded its authority by approving SWEPCO's need to secure 1,600 megawatts of electricity five months before it approved Turk itself - and more than two years before permitting lines that would link the plant to the electric grid.

"We think that Turk ultimately will be constructed. But we are weighing our options," Chodak said. "All of our stakeholders have asked us in good faith to continue construction of the plant ... and we feel it's the right thing to do.

"But [in the long term] we really don't know yet. It depends how things go."

APPEAL STRATEGY

In their petition before the Supreme Court, SWEPCO attorneys Kelly McQueen, David Matthews and Stephen Cuffman contend that a half-dozen areas in the appeals ruling are ripe for review.

One concerns the "plain language" finding, which SWEPCO says is faulty. It argues that the six-judge panel reviewed only a "general legislative finding" and "wholly ignored or disregarded ... operative sections" of the state's Utility Facility Environmental and Economic Protection Act.

SWEPCO contends that the appeals court also ignored a 2003 legislative mandate that requires a resource planning docket to determine the need for a new power facility before utilities can ask for specific plants to be approved.

In addition, SWEPCO argues that the appeals decision ignored specific findings and evidence presented by the commission that supports the need for Turk.

SWEPCO also contends that reversing the commission was improper because no "showing of harm" to the appellants - the Hempstead County Hunting Club and other landowners - was made.

"We followed all the rules," Chodak said. "These are the same procedures that have been used to approve power plants [in Arkansas] for the last 30 years."

Sierra Club Regional Director Glenn Hooks disagreed and called for SWEPCO to "immediately" halt construction at Turk.

"Even multimillion-dollar corporations are required to follow the law," said Hooks, who attended the news conference. "Since 2001, 99 proposed coal-fired plants have been rejected as too risky to our environmental, economic and public health. Arkansas should follow the lead of its neighbors in Oklahoma, Louisiana and Texas and reject the Turk plant."

During the news conference, Chodak noted that regulators in Louisiana and Texas have approved Turk. He also took shots at Turk's opponents, accusing them of trying to "hijack" the plant's approval in Arkansas.

He took particular aim at the hunting clubs - groups he described as "elite" that cost hundreds of thousands of dollars to join and whose members often do not live in southwest Arkansas.

"These elite few hope to control acreage they do not own at the expense of jobs for Arkansas families and energy for the development of Arkansas' economy," Chodak said. "Although I am deeply moved by the elite hunt clubs' heartfelt concern for the health of their ducks, I am more concerned about the economic development of the communities we serve."

Hooks said it was regrettable that SWEPCO would reduce Turk to a "class warfare" debate.

"Playing the elite card is disingenuous," Hooks said. "Every Arkansan should be concerned about their health, the economy and the environment."

As for those who live in Hempstead County, the appeals decision has many residents who are counting on Turk's success "very concerned," said Wesley Woodard, president of the Hempstead County Economic Development Corp.

According to SWEPCO, the plant will employ more than 1,000 people at the height of construction, as well as produce 110 permanent jobs and about $3.9 million in annual school and county property taxes by its scheduled completion in 2012.

"With the recent manufacturing layoffs in and around southwest Arkansas, it is imperative that construction continue," Woodard said.

Front Section, Pages 1, 5 on 06/30/2009