An administrative law judge who serves as general counsel for the Oklahoma Corporation Commission announced today she is recommending the proposed 950-megawatt, coal-fired power plant near Red Rock in northern Oklahoma be built, saying the plant is needed and that the high-technology facility represents a "reasonable resource choice."
In her report, Administrative Law Judge Maribeth Snapp said the partners proposing Red Rock had demonstrated that the additional generating capacity that the Red Rock unit would provide is needed to meet a growing state demand for electricity.
"The proposed ultra-supercritical, coal-fired generation facility will satisfy the need of PSO and OG&E for a coal-fired baseload facility," she said.
Commissioners Jeff Cloud, Bob Anthony and Jim Roth are expected to announce their decision in September.
OG&E Electric Services announced earlier this year they signed an agreement with Red Rock Power Partners to build the plant pending regulatory approval. Others signing the agreement included Public Service Company of Oklahoma and the Oklahoma Municipal Power Authority.
At a July 30 Oklahoma Corporation Commission meeting, Chesapeake Energy Corp.'s CEO Aubrey McClendon opposed the plant due to cost and environmental concerns, he said.
Oklahoma City-based Chesapeake Energy's Tom Price Jr. said the company finds it difficult to understand the judge's decision. Price said the rest of the United States is getting away from using carbon not only because of the volatile nature of the cost but environmental concerns as well.
"In Washington over the past year, a multitude of bills have been introduced that would impose a 'carbon tax' - for every ton used there would be a tax $30 to $50. It seems hard for us to internalize (that) an administrative law judge could dismiss what is happening all over our nation," Price said. "The cost (of the plant) is already 20 to 40 percent over the original estimate. The price will be paid by the rate payers."
The judge's report states the proposed facility "provides the benefit of a lower heat rate which results in lower fuel cost, lower emissions costs, a lower revenue requirement over the life cycle of the plant ... and is a reasonable resource choice and in the best interests of PSO's and OG&E's customers."
"We are very pleased that the judge agrees with us about the future need for this generating capacity to power Oklahoma's continued economic growth," said Brian Alford, director of corporate communications for OG&E, in a statement. "Our proposal has been the subject of a highly public-opposition campaign, so we are pleased the ALJ report was based on the merits of our case."
At the same time, OG&E officials said they are concerned that the judge is not recommending full recovery of financing costs during construction.
"Our rationale for this is to protect our customers from higher costs," Alford said. "We look forward to explaining it before the full three-member commission as the Red Rock case continues." -Stefanie Brickman
More Chesapeake Energy, Red Rock Plant coverage:
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