New regulations could cost coal plant $2.8B

HEMPSTEAD COUNTY, ARKANSAS - A proposed coal-fired power plant being built in southwestern Arkansas could end up paying $2.8 billion over 40 years because of new federal carbon penalties, a study by opponents claims.

New figures from the Southwestern Electric Power Co. put the cost of building the plant at about $2 billion, counting the costs of upgrading power lines and substations and obtaining an air permit. But opponents say a tougher stance by the Environmental Protection Agency on greenhouse gases will drive costs even higher for the project — which will be funded by ratepayers.

"The main thing that the utility was not willing to admit... was that the future costs of containing or controlling the (carbon dioxide) from this plant will be vastly greater than they ever anticipated or were willing to admit at the time," said Jim Metzger, the study's author, told reporters.

Metzger estimated the John W. Turk Jr. plant being built in Hempstead County would likely have to spend more than $163 million annually — or $2.8 billion over 40 years — just to contain or abate carbon dioxide emissions.

The 60-page study, done on behalf of the Sierra Club and Audubon Arkansas, comes after the EPA announced it was reviewing a Bush policy on new coal-fired power plants. The old policy prohibits using the federal permit process to require new coal-fired power plants to install equipment to reduce carbon dioxide.

Because of moves like that, at least 59 proposed coal-fired projects nationwide have been canceled or delayed, according to anti-coal groups.

SWEPCO officials dismissed the study as speculative.

"It's another delay tactic," SWEPCO spokesman Scott McCloud said. "All their purpose is, is to derail the Turk project."

Opponents are challenging an air permit for the plant granted by the state environmental regulators. Meanwhile, the utility asked the state for a $53.9 million rate increase Thursday, in part to cover financing costs for the power plant.

SWEPCO, based in Shreveport, La., is a subsidiary of Columbus, Ohio-based American Electric Power, among the largest electric utilities in the country.