Supreme Court asked to block consideration of coal-fired plant

Chesapeake Energy Corp. and a coalition of consumer groups want the Oklahoma Supreme Court to stop the Corporation Commission from considering pre-approval of a 950-megawatt coal-fired electrical generating unit proposed by Oklahoma power producers.

The effort is the latest involving Oklahoma City-based Chesapeake, the third largest independent producer of natural gas in the U.S., to question plans for coal-fired generating plants in Oklahoma and Texas. Natural gas competes with coal as a fuel for power plants.

Chesapeake was part a coalition of business and energy interests that bought more than $1 million in newspaper advertising earlier this year critical of the Texas proposals. Energy giant TXU Corp. has proposed 11 coal-fired plants and as many as 18 plants could ultimately be built.

Opponents say natural gas burns much cleaner than coal and causes fewer environmental problems.

Tom Price, a senior vice president at Chesapeake, said Wednesday it would not be right for Chesapeake to criticize the Texas proposals and do nothing as plans go forward for the largest coal-fired generating plant in Oklahoma history.

"We think it would be the height of hypocrisy," Price said.

In Oklahoma, Public Service Company of Oklahoma, Oklahoma Gas & Electric Co. and the Oklahoma Municipal Power Authority are partners in the 950-megawatt coal-fired Red Rock generating unit.

PSO will own 50 percent, OG&E will operate the facility and own 42 percent and the Oklahoma Municipal Power Authority, which provides electric power to about 20 communities in the state, will own 8 percent.

Red Rock, which officials plan to locate in an area adjacent to OG&E's Sooner Power Plant facilities in northern Oklahoma, will cost about $1.8 billion. PSO is also seeking pre-approval of gas-fired peaking power plants near Jenks and Anadarko.

Chesapeake and the Quality of Service Coalition, a group of utility customers and cities that purchase power from PSO, allege that a state statute authorizing the Corporation Commission to pre-approve projects so utilities can recover construction-work-in-progress expenses is unconstitutional.

The pre-approval process was approved in legislation passed by the Legislature in 2005. But Chesapeake said the Oklahoma Constitution was not amended as required to grant the commission that new power, Chesapeake said in a statement.

"An unconstitutional attempt to give the commission the powers to approve contracts seems to be under way," Chesapeake said.

Chesapeake and the coalition asked the Supreme Court to block pre-approval hearings on Friday. Oral arguments are set July 10 before Supreme Court referee Daniel Karim, said Lee Paden, attorney for the coalition.

They have also asked the commission to postpone pre-approval hearings on the project, set to start on July 2, Paden said.

Paden said the coalition questions whether a massive coal-fired power plant is needed when 10 new gas-fired facilities generating up to 7,000 megawatts of power have been built in the state since 1999.

"Does this really make sense?" Paden said.

Many of the new generating units are privately owned and operate below their capacities, he said. The 1,150 megawatt Calpine-Oneta gas-fired plant in northeastern Oklahoma went on line about four years ago but generates only about 10 percent of its peak capacity, Paden said.

"The more we analyzed what was being presented, the more concerns we had," he said.

Source : www.cushingdaily.com