UPDATE 1-Arkansas board allows AEP coal plant work to resume

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LOS ANGELES, Dec 5 (Reuters) - Construction can resume at an American Electric Power Co AEP.N utility's coal-fired power plant in Arkansas while an air permit issued for it is under appeal, the Arkansas Pollution Control and Ecology Commission ruled on Friday.

Soon after the decision, construction resumed at the Southwestern Electric Power Co’s (SWEPCO) 600-megawatt John W. Turk Jr. plant near Texarkana, Arkansas, spokeswoman Kacee Kirschvink said.

The Arkansas Department of Environmental Quality issued SWEPCO an air permit Nov 5 for the $1.6 billion plant. Construction began, but was delayed when an appeal to that decision was filed Dec. 1 by the Sierra Club, Audubon Arkansas and nearby landowners.

The commission voted 7-1 to lift a stay order placed on construction and will in the coming months continue to review the appeal, said Ilan Levin, attorney for the Sierra Club.

The plant is scheduled to open in 2012.

Plans for dozens of coal power plants have been scuttled in the past few years as concerns about global warming increase the chance that carbon dioxide regulations may be enacted, making coal plants more expensive.

Kirschvink of SWEPCO said about 400 people currently are working to build Turk, and the workforce will rise to about 725 in a few months. At the peak of construction, Turk will put 1,400 to work, she said.

SWEPCO said it was concerned about cost to customers, who will end up paying for the plant, which Kirschvink said is about $300 million costlier than it was just we months ago.

She said the cost of less-polluting natural gas plant would not meet the company’s aim of “building the most affordable plant for our customers as well as a plant that is the least impactful to the environment for coal plants.”

Kirschvink said the Arkansas Department of Environmental Quality studied the environmental impact for two years. Even so, the Sierra Club’s Levin said the impact of carbon dioxide emissions has yet to be considered.

Levin said Arkansas and Texas appeared less negative toward coal plants than most other U.S. states. Still, in Texas, plans for coal plants have been scaled back and current plans for Turk show lower emissions of mercury, sulfur oxides and nitrogen oxides than ones presented in 2006,

Levin and Ken Smith of the Audubon Society in Arkansas claimed the Arkansas commission that acted on Friday is tilted toward economic considerations over environmental ones. (Reporting by Bernie Woodall; Editing by David Gregorio)