An electric utility seeking to increase Arkansas customers' rates should conduct an economic analysis of closing and replacing its coal-fired plant south of Shreveport, an environmental group contended in a filing Tuesday.
The Sierra Club has asked the Arkansas Public Service Commission to require Southwestern Electric Power Co. to update a document that electric utilities must file with the commission.
Called an Integrated Resources Plan, the document outlines a utility's goals and accompanying decision-making processes.
Currently, SWEPCO's plans in Arkansas and Louisiana do not include analyses of whether continuing to operate the Dolet Hills coal-fired power plant in Louisiana is more cost-effective than other options.
"If SWEPCO wants to keep an aging and dirty coal plant like Dolet Hills operating, the utility needs to show that the unit has value to customers," Glen Hooks, executive director of the Sierra Club's Arkansas chapter, said in a statement released to the Arkansas Democrat-Gazette.
"In many places across the country, cleaner options like solar and wind power have become even less expensive than burning dirty coal. The Sierra Club asked SWEPCO to properly analyze the value of Dolet Hills in its IRP, but they did not do so -- we are now requesting that the Public Service Commission require this analysis," Hooks said.
A stakeholder committee that developed SWEPCO's Integrated Resource Plan reported that the company went beyond its requirements in developing the plan.
Further, the utility has announced a 1,200-megawatt wind energy project.
"Not satisfied with these major steps toward more renewable energy, the Sierra Club continues its efforts to undermine other resources serving our customers," SWEPCO spokesman Peter Main told the Arkansas Democrat-Gazette in a statement.
SWEPCO has ownership stake in the Dolet Hills plant, but it is co-owned and operated by Cleco, a Pineville, La., company.
The Dolet Hills plant opened in 1986 with a 650-megawatt generation capacity. The company now reports its capacity at 638 megawatts of power generation. It's powered using lignite, a type of coal mined in two northwest Louisiana parishes. Lignite is less commonly used but is frequently accused of being the type of coal that has the most harmful emissions.
The Sierra Club's request is not asking the Public Service Commission to do anything unique. In 2017, the Oregon Public Service Commission ordered PacifiCorp to conduct an economic analysis of its coal investments after a petition from its customers.
The Sierra Club has made similar requests before, Hooks said.
The environmental group, through filings and campaigns, has helped pressure the closure of 287 coal-fired plants since 2010, according to its Beyond Coal Campaign website. The group reports 287 plants closing since the beginning of the push, more than the number of coal-fired plants that are in operation, 243. That's only about 40.5 percent of the capacity of coal-fired power in the United States, however.
In Arkansas, the groups, along with the National Parks Conservation Association have negotiated a settlement -- not yet approved in federal court -- on reported Clean Air Act violations, to close the two largest coal-fired plants in Arkansas, which largely lack modern environmental controls. If approved by a federal judge, the plants would close by 2029.
SWEPCO asked the Arkansas Public Service Commission on Feb. 28 to raise rates for its approximately 118,900 western Arkansas customers by 24 percent.
That means, if approved, a customer with a $100 monthly bill would have a bill of $124. That would generate $45.6 million annually for the company.
At the time, SWEPCO President and Chief Operating Officer Malcolm Smoak said the utility had not asked for a general rate increase in Arkansas in 10 years and noted that the company has made infrastructure investments since then.
But Sierra Club and other groups argue that the rapidly declining cost of renewable and emissions-free electricity generation, such as solar panels, make running a coal-fired plant cost-ineffective.
In its filing Tuesday, the organization commended SWEPCO for its planned wind energy project. That project is proof that the company's modeling shows renewable energy, such as wind and solar power, as the "least-cost options for Louisiana ratepayers," the filing reads.
"Arkansas and Louisiana ratepayers are paying for poor operational decisions," Hooks wrote in an email to the Arkansas Democrat-Gazette. "While the co-owner of Dolet Hills (Cleco) has recognized it's not worth operating and that its customers would save money by seasonal operations, SWEPCO hasn't done any analysis or even disclosed that fact to the Arkansas Public Service Commission. Given that, we are asking the PSC to require SWEPCO to do an analysis that includes a valuation of Dolet Hills."
SWEPCO is a subsidiary of American Electric Power. Based in Shreveport, it provides power to Arkansas, Louisiana and Texas. The company owns half of and operates the Flint Creek coal-fired plant in Gentry, Ark., which opened in 1978, and 73 percent of the John W. Turk coal-fired plant in Fulton, Ark., which opened at the end of 2012.
Metro on 04/17/2019
CORRECTION: A stakeholder committee that developed Southwest Electric Power Company’s Integrated Resource Plan reported that the company went beyond its requirements in developing the plan. An earlier version of this article incorrectly described who made that determination.