Coal, Cogeneration, Emissions, Gas, Retrofits & Upgrades

IPP group challenges OG&E’s acquisition of coal-fired Shady Point plant

The longtime AES Shady Point coal-fired plant in southeastern Oklahoma has a new name, new owner and new challenger.

Oklahoma Gas & Electric (OG&E) acquired the 360-MW Shady Point in a deal completed in May. OG&E had decided last year to end its longtime power purchase agreement with the plant, then opted to acquire it for close to $27 million.

The Oklahoma Corporation Commission and Federal Energy Regulatory Commission both approved the deal for the coal-fired plant now renamed River Valley. A organization calling itself Oklahoma Energy Results, however, is challenging the OG&E move and asking the state’s Supreme Court to repeal the Corporation Commission’s decision, according to multiple news groups.

The challenge is not on environmental grounds, but on the competitive bidding process used by the utility to decide on acquiring both AES Shady Point and the 146-MW gas-fired Oklahoma Cogeneration LLC properties. Oklahoma Energy Results represents an independent power producer within the state, according to the Oklahoman.

The challenge also questions the rate impact on customers by the deal.

Last year, OG&E announced it was ending the PPA with Shady Point because the economics of the agreement did not work out.  The utility actually talked about a request for outside proposals before opting to make a bid to buy the plant from AES Corp.

Ending of the PPA would possibly have forced the Shady Point plant to close. It employs close to 100 people in a high unemployment region of southeast Oklahoma.

River Valley Power Plant is coal-fired but has natural gas available at the site, a company spokesman previously said. OG&E will explore the feasibility of converting it to natural gas-fired generation.

Oklahoma Cogeneration LLC has billed itself as the first natural gas-fired combined-cycle cogeneration plant built and operated in Oklahoma. It achieved commercial operation 30 years ago.

The utility previously had two other coal-fired units within the state. OG&E spent close to $534 million on installing scrubbers on the two units at Sooner Power Plant in Noble County. The Muskogee Power Plant was converted from coal to gas-fired units this year.