Coal, Emissions

OG&E ending Longtime PPA with Coal-Fired AES Shady Point

Oklahoma Gas & Electric is terminating its 30-plus-year power purchase contract with a coal-fired plant in the southeast portion of the state.

OG&E spokesman Brian Alford said that ending the power purchase agreement with AES Shady Point was more about the economics of findng a long-term deal and did not comment on any environment aspects of replacing the coal power. The 300-MW PPA—which has been in place since around 1985—will end in January 2019.

“We will, in short order, move forward with an RFP to replace the capacity,” Alford said. “Our RFP will be for 400 MW.”

The original PPA was going to expire this year, with OG&E and AES working unsuccessfully on an agreement. Once the end of the PPA became obvious, the two companies set the expiration for January.

AES has said that it would close the plant if it lost the utility contract. The plant is technically a co-generation facility because it has used some of the steam energy for other purposes.

Numerous other generation sources, including those fired by low-cost natural gas, have popped up in or near the OG&E service territory in the intervening years. This has led the Oklahoma City-based utility to shop those other sources.

“We believe the RFP will deliver significant cost savings,” Alford said.

He would not rule out a return to using AES Shady Point power, although outside pressures of economics and emissions reduction possibily make that unlikely. Alford did not comment on those factors but did compliment AES for their hard-working relationship.

“We have had a positive long-term relationship with AES,” he said. “We appreciate the hard work and dedication of their employees……We look forward to them participating in the RFP process.”

AES Shady Point employees about 100 people in LeFlore County, an area of relatively high unemployment.