American Electric Power, whose SWEPCO subsidiary has been stymied in court on getting Public Service Commission approval for a coal-fired generating plant in Hempstead County, filed a brief notice with the PSC today saying it will no longer seek PSC approval for the plant as part of the retail rate base.

This means the utility will take the option of building the plant as a “merchant plant” and recover costs by wholesale sales, including, presumably, to its subsidiaries, as well as to its retail customers in Louisiana and Texas, where regulators have signed off on the plant. The filing says:


SWEPCO hereby notifies the Commission that the construction and operation of the Turk Plant WiII proceed in accordance with the exemption set forth in Ark. Code Ann. 8 23- 18-504 (a)(5). Accordingly, SWEPCO will not seek to recover the costs of the Turk PIant in rates subject to regulation by the Commission.

SWEPCO had requested a rehearing of the state Supreme Court’s reversal of PSC approval of the plant. A rehearing was denied today, prompting the decision to change direction. The Supreme Court denied the rehearing request without comment. This was expected because the earlier court ruling had been unanimous.

BE ADVISED: There’s no clear path to construction of this plant, despite the tens of millions of dollars SWEPCO says it has already spent. A lawsuit pends in federal court over environmental issues and federal Judge Bill Wilson, in refusing to dismiss the suit, has already posed some tough questions. The Sierra Club, Audubon Arkansas and owners of a nearby hunting club on some prime forest and wetlands will continue their fight. (See news release on jump.)