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Industry News

New Coal-fired Power Plant Announced for Oklahoma

LCG, July 20, 2006--A group of electric utilities Tuesday announced plans to build a new, 950-MW electric generating plant in north-central Oklahoma. The project will be a joint venture of American Electric Power-Public Service Company of Oklahoma (AEP), Oklahoma Gas & Electric Company (OG&E) and the Oklahoma Municipal Power Authority (OMPA). The estimated cost of the new facility is $1.8 billion.

The new electric generating unit will be located adjacent to OG&E's existing coal-fired Sooner Power Plant near Red Rock, Oklahoma. The single new unit will be used to meet the growing demands for electricity in Oklahoma. The percentage ownership of the plant for AEP, OG&E and OMPA will be 50 percent, 42 percent and 8 percent, respectively. The new unit will be operated by OG&E and will burn low-sulfur coal from the Powder River Basin in Wyoming.

The utilities are pursuing the joint venture to reduce costs through economies of scale and through building a single unit. The project is contingent upon successful contract negotiations and regulatory approvals, including from the Oklahoma Corporation Commission. According to OG&E, the project will be the first to use provisions of Oklahoma House Bill 1910 - which was signed into law last year - that allows utilities to seek pre-approval of such projects before taking on the burden of such a large expense.

Project construction could start in 2007, and operations are scheduled to commence by the summer of 2011.
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