A natural gas power plant in El Dorado, whose owner filed for bankruptcy protection this week, is a possible source for electricity that would help Arkansas meet strict new clean air standards.
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The 2,200 megawatt Union Power Station, owned by Entegra Power Group of Tampa, Fla., is one of the largest natural-gas powered plants in North America.
It can generate enough power to provide electricity to every home in Arkansas on a day with only average electrical demand, company executives have said. At 85 percent capacity, it can produce more electricity than Entergy's Arkansas Nuclear One facility near Russellville operating at full capacity, according to executives.
The plant was producing electricity at 24 percent of its capacity, on average, an Entegra official said in August 2009. Two company executives did not respond to requests seeking comment on the plant's current output.
"It is likely that when the [Environmental Protection Agency] set its [carbon dioxide] reduction target for Arkansas, it considered the capacity of the Union Power Station in El Dorado as an available option for converting coal fired power to natural gas," said Teresa Marks, director of the Arkansas Department of Environmental Quality. "I anticipate that we will be following this matter and will need to take the continued viability of this option into consideration when making comments on the clean power plan as well as when we begin drafting the state plan."
In June, the state's Department of Environmental Quality and the Public Service Commission hosted a meeting to address standards placed on Arkansas by the federal Environmental Protection Agency to lower carbon dioxide emissions. The group will meet again Aug. 28 at the Department of Environmental Quality's office in North Little Rock.
The federal agency proposed that Arkansas reduce its carbon dioxide emissions by 44 percent by 2030, significantly higher than the country's average goal. Nationally, the agency sought to lower overall emissions by 30 percent by 2030.
Union Power Station is a merchant plant and not owned by a utility regulated in Arkansas, said John Bethel, executive director of the general staff of the Public Service Commission. A merchant plant is one that sells power on the open market.
Entegra is a part of the group involved with the commission and the Department of Environmental Quality that is addressing ways for Arkansas to meet the proposed federal emissions standards.
"That [El Dorado] facility and all other natural gas facilities -- and all other generating facilities -- have a role to play of some sort, and if it is a matter of reducing the output of the state's coal facilities, it may involve increasing the output of the natural gas facilities, including [the Union Power Station]," Bethel said.
Entegra's bankruptcy doesn't threaten to close the El Dorado plant.
The bankruptcy filing was made Monday to restructure debt, said Bill O'Brien, Entegra's vice president for engineering and operations and a former plant manager of Union Power Station.
"[Entegra] will continue with the normal course of business," O'Brien said in an email to the Union County Water Conservation Board, one of Entegra's largest unsecured creditors. "We will continue operations at the Union Power Station facility for the term of the bankruptcy without any interruption."
Another purpose of the bankruptcy filing was to deal with creditors who did not want to convert their debt to equity, said Pete Parks, an El Dorado accountant who serves on the Union County Water Conservation Board, which is owed about $180,000.
"The bulk of the creditors were willing to convert their debt to equity," Parks said. "But a few of them did not. Our debt will be paid in full and we will continue to supply water to them."
Entegra's largest creditor is Wells Fargo, which is owed more than $1.3 billion.
There are at least eight Arkansas firms that are among the major creditors in the bankruptcy filing -- Entergy Arkansas, which is owed about $186,000; Union County Water Conservation Board; Diversified Services Lawn and Garden of El Dorado, which is owed about $125,000; Coatings, Insulation and Asbestos Specialist of Camden, which is owed about $103,000; John Ingram Inc. of El Dorado, which is owed almost $80,000; TJC Crane of Camden, which is owed almost $59,000; Advent Systems of North Little Rock, which is owed almost $39,000 and CP&P Construction of El Dorado, which is owed about $37,000.
Business on 08/09/2014