TEXARKANA — Southwestern Electric Power Co. has submitted a rate-increase plan to the Public Utility Commission of Texas to recover costs related to the construction of the John W. Turk Jr. power plant just east of McNab in Hempstead County.
If approved, the increase will come in three steps over 21 months, and Texas customers who use 1,000 kilowatthours per month could see a nearly $13 increase by December 2013.
The first step is April 2012 to October 2012. Customers who use at least 1,000 kilowatt-hours would see an increase of about $3.30 per month.
The second increase of about $4 per month would be from November 2012 to November 2013.
The last phase involves submitting a proposal in May 2013 to increase the base rate by $5.61 per month for customers.
The average July bill for customers who use 1,000 kilowatt-hours was $160, said Scott McLeod, a SWEPCO spokesman.
The three-step plan lessens the financial impact on customers by spreading the increase over time, said Venita McCellon-Allen, president of the company. She said the arrangement was based on customer feedback.
The company is building the 600-megawatt coal-fired power plant on a 2,900-acre site about 15 miles northeast of Texarkana.
SWEPCO has fought numerous legal battles over construction of the plant, eventually reaching a settlement in July with its biggest opponent, the Hempstead County Hunting Club, which is located near the plant. The company still faces legal challenges from the Sierra Club and the National Audubon Society.
The plant is expected to cost about $2.1 billion.
The construction costs of the plant cannot be recovered in Arkansas, since SWEPCO elected to continue the plant’s construction without seeking a Certificate of Environmental Compatibility and Public Need from the state.
Under Arkansas law, two options are available when seeking to recover costs for constructing an electric power plant. The regulated utility can recover the costs from its retail customers through approved rate increases or it can sell power to other markets, which does not require a Certificate of Environmental Compatibility and Public Need.
SWEPCO, after deciding not to seek the certificate after several court proceedings, filed a notice to change the plant’s status. The change only affects the Arkansas portion of the plant.
The utility commission in Texas approved the plant’s construction in July 2008.
The Turk plant is designed as a baseload plant, running 24 hours a day, seven days a week. It is more than 70 percent complete and scheduled to be online in the fourth quarter of 2012.
SWEPCO services 181,000 customers in East and North Texas, as well as customers in western Arkansas and central and northwest Louisiana.
SWEPCO owns 73 percent of the Turk plant. Arkansas Electric Cooperative Corp., which has 490,000 customers in the state, owns 12 percent of the plant.
Arkansas, Pages 13 on 09/03/2011