November 21, 2007 / 8:35 PM / 12 years ago

UPDATE 1-Arkansas OKs AEP's proposed Turk coal power plant

(Updates with Arkansas decision, recasts throughout)

NEW YORK, Nov 21 (Reuters) - Arkansas utility regulators on Wednesday approved of American Electric Power Co’s (AEP.N) proposal to build the $1.3 billion, 600-megawatt John W Turk Jr. coal-fired power plant in Fulton, Arkansas.

In an order, the Arkansas Public Service Commission agreed to grant AEP’s Southwestern Electric Power Co subsidiary a certificate of environmental compatibility and public need to build the plant.

AEP has said the plant will burn low sulfur Powder River Basin coal and will use ultra-supercritical pulverized coal technology, which operates at higher temperatures and pressures that increases the efficiency and reduces emissions compared with traditional coal-fired plants.

AEP hopes to complete the project in mid 2011.

In May, AEP said it awarded the engineering, procurement and construction contract for the plant to The Shaw Group Inc SGR.N, of Baton Rouge, Louisiana. AEP said that contract was worth about $700 million.

Also in May, McDermott International Inc (MDR.N), of Houston, said AEP awarded McDermott’s Babcock & Wilcox Co subsidiary a contract worth more than $250 million for the boiler and environmental control equipment for the plant.

McDermott said B&W has already begun engineering work at its Barberton, Ohio-headquarters and would fabricate the pressure parts at its joint venture Babcock & Wilcox Beijing Co Ltd in China. B&W expects to begin construction work in 2008.

Construction of the plant would create up to 1,400 construction jobs, AEP said in its May release.

Fulton is located in Hempstead County about 20 miles northeast of Texarkana on the Arkansas-Texas border.

Earlier Wednesday, Reuters reported the Arkansas PSC would decide whether to approve of the plant by Dec. 15, according to a release issued this week by Americans for Balanced Energy Choices, a nonprofit group that supports the project.

AEP, of Columbus, Ohio, owns and operates more than 38,000 MW of generating capacity, markets energy commodities, and transmits and distributes electricity to more than 5 million customers in 11 states.

ARKANSAS AND COAL

Across the United States, energy companies have about 45 coal plants permitted, near construction or under construction, representing about 23,000 MW of generating capacity, according to data from the U.S. National Energy Technology Laboratory (NETL) released in mid October. The NETL figures do not include the Turk proposal.

The NETL figures however, do include Dynegy Inc’s DYN.N 665 MW Plum Point pulverized coal power plant, which is under construction in Osceola in the northeastern part of the state near the Missouri and Tennessee borders. Dynegy expects Plum Point to enter service in 2010.

Of the 14,500 MW of generating capacity in Arkansas - about 48 percent is natural gas fired; 26 percent is coal fired; 12 percent nuclear; and 10 percent hydropower. (Reporting by Scott DiSavino; Editing by Christian Wiessner)

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