East Texas

By BETTY WATERS
Staff Writer

The Public Utility Commission of Texas granted Southwestern Electric Power Company a certificate Thursday empowering the utility to charge its approximately 170,000 retail customers in East Texas higher rates to help pay for a new power generating plant in Arkansas.

The commission voted, 2-to-1, after a 40-minute discussion during the open portion of its meeting in Austin to grant SWEPCO a certificate of convenience and necessity.

Chairman Barry Smitherman and Commissioner Paul Hudson favored the certificate, while Commissioner Julie Parlsey voted against it.

“It gives SWEPCO the approval, in essence, at some point to pass along certain costs to its Texas customers involving the development and completion and operation of the proposed plant,” PUC spokesman Terry Hadley said after the meeting.

The actual rate SWEPCO would charge will be developed later and must be approved in further action by the PUC, according to Hadley.

Company spokesmen told the PUC they expect the coal-fueled, 600-megawatt John W. Turk Jr. Power Plant to be completed in 2012 near Fulton in Hempstead County, Ark., about 15 miles northeast of Texarkana. They may file earlier for a rate increase to help recoup development costs from its Texas customers through higher rates, but a rate increase to help cover operating costs would have to wait until about 2012, Hadley said.

SWEPCO’s East Texas customers are scattered among numerous cities and communities, including Gladewater, Henderson, Mineola, Big Sandy, Gilmer, Overton, Hawkins, Kilgore, Longview, Carthage, Marshall and Center. The utility also has approximately 112,000 customers in western Arkansas and 181,000 in Northwest Louisiana.

The Arkansas and Louisiana public service commissions have already approved SWEPCO’s request for permission to construct the plant, although construction will not start until the utility receives an air permit from the Arkansas Department of Environmental Quality.

The proposed generation plant in Arkansas is one of three plants SWEPCO plans to build to meet increasing electricity demands of customers.

The impending rate increase for Texas customers is opposed by an Austin-based group called Texas Electric Ratepayers Alliance. Eric Bearse, spokesman, issued this statement: “We are clearly disappointed by the commission’s ruling, and concerned about the impact it will have on Northeast Texas ratepayers. We believe we made a strong case that the plant is not needed, but we are nonetheless hopeful that the conditions to be included in the order will provide some level of ratepayer protection.”

The alliance argued that Northeast Texans don’t need a double-digit rate hike on electricity with rising costs for food, fuel and electricity. The group projected the rate hike will increase electricity bills for the average homeowner $210 a year; for the average department store, $45,000 yearly; for the average hospital, $174,000; and for the average local manufacturer, $200,000.

SWEPCO countered that it will continue to be a low-cost provider and cited data showing SWEPCO’s average residential rate in Texas is 20.23 percent less expensive than the state average and 30.5 percent less than the national average.

The utility’s average commercial rate in Texas is 24.7 percent less expensive than the state average and 34.42 percent less than the national average. Its industrial rate is 11.6 percent lower than the state average and 15.94 percent less than the national average.