August 29, 2018 Read More →

Oklahoma coal plant loses contract, puts future in doubt

The Oklahoman:

The future for an independent power generator and its roughly 100 employees in eastern Oklahoma is decidedly hazy.

An executive with AES Shady Point, a coal-fired electrical generation facility in Le Flore County, said Tuesday the plant could close as soon as January. Lundy Kiger, AES Shady Point’s vice president, said that may be the only alternative for the 360-megawatt facility after receiving notification from Oklahoma Gas & Electric Co. this month that the larger utility won’t execute another five-year extension of a long-running power purchase agreement between the two that’s been around since 1991.

OG&E entered into the power purchase agreement with AES as part of its compliance with the Public Utility Regulatory Policies Act of 1978, which Congress enacted as part of the National Energy Act. The initial agreement between AES and OG&E was good from 1991, when the plant went online, through 2008, with an option for the parties to extend the agreement by five years up to three additional times.

But its cost to produce the power OG&E has bought to provide part of its needed generating mix has become comparatively more expensive than other alternatives over time, especially as the power market has become much larger and much more competitive.

The utility notified AES in early 2017 it likely would seek proposals from various power providers to consider other alternatives this year, before agreeing to keep the contract in place until the start of 2019.

More: Cheaper power is dimming the future of a coal-fired electricity generator in Oklahoma

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