AEP utility starts first U.S. ultra-supercritical coal unit

HOUSTON Thu Dec 20, 2012 7:22pm EST

HOUSTON Dec 20 (Reuters) - American Electric Power Co's Louisiana-based utility said its $1.8 billion Turk power plant in Hempstead County, Arkansas, has begun commercial operation, the nation's first ultra-supercritical coal-fired unit and one of the few coal plants currently being completed.

The 600-megawatt John W. Turk Jr. power plant is owned by Southwestern Electric Power Co (SWEPCO) and was built in about four years despite numerous legal challenges by local and environmental groups to stop the plant.

U.S. power companies began planning dozens of new coal plants in the mid 2000s when natural gas prices soared and power demand was rising, making coal plants economical.

However, many projects were delayed or canceled as environmental groups launched legal challenges and gas prices tumbled with increased domestic production. The recession pared expectations for power demand growth, and federal regulators implemented stricter emission limits for coal plants, including a proposal to limit carbon dioxide emissions from new plants.

Turk uses an advanced coal combustion technology that burns low-sulfur coal at higher temperatures, which requires less coal and produces fewer emissions, including carbon dioxide, than traditional pulverized coal plants, SWEPCO said.

"The Turk Plant is yet another example of AEP's long history of advancing coal-fueled generating technologies," said Nicholas Akins, AEP's chief executive officer, in a statement.

Turk will supply power for SWEPCO's 406,000 retail customers in Louisiana and Texas, as well as about 400,000 customers of an East Texas electric cooperative.

In Arkansas, where the Arkansas Supreme Court reversed state regulatory approval allowing the plant to serve retail customers, Turk will sell power to SWEPCO's wholesale customers - the cities of Hope, Prescott and Bentonville - and the 490,000 customers of the Electric Cooperatives of Arkansas.

SWEPCO holds a 73 percent stake in the plant. Co-owners include the Arkansas Electric Cooperative Corp, 12 percent; East Texas Electric Cooperative, 8 percent; and the Oklahoma Municipal Power Authority, 7 percent.

The project was announced in August 2006. An air permit issued in 2008 was the subject of a number of court appeals.

In late 2011, SWEPCO announced a broad settlement to end pending legal challenges to the plant's air and wastewater permits brought by the Sierra Club, the National Audubon Society and Audubon Arkansas.

SWEPCO agreed not to build more coal-fired generation within 30 miles of the Turk plant, to limit output at an older coal-plant in Texas, to build 400 megawatts of renewable generation, to test emissions from the plant, to contribute millions of dollars to The Nature Conservancy and the Arkansas Community Foundation and to pay the opponent's legal fees.

SWEPCO president Venita McCellon-Allen said the Turk plant "demonstrates our commitment and ability to meet stringent environmental standards set by federal and state regulatory agencies."

The plant will have 109 permanent workers with an estimated annual payroll of $9 million, SWEPCO said.

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