Quorum court OKs tax break for new $1.85B power plant

Above: A computer rendering of the proposed natural gas-fired plant that will be built on the location of the Independence Steam Electric Station in Newark.

By Andrea Bruner, White River Now

The clock is ticking on the coal-fired plant at Newark, but that doesn’t mean the community is losing its power plant altogether.

Monday night, the Independence County Quorum Court approved a resolution to aid the Arkansas Electric Cooperative Corporation (AECC) in the form of a tax break to help facilitate a new power plant, according to County Judge Kevin Jeffery.

“This will be on the same property as the existing coal plant,” he said.

Independence Steam Electric Station is scheduled to sunset operations in 2030, and as that plant ceases to operate in four years, Jeffery said the goal is to have the new natural gas-fired plant turned on at the same time.

“This is great news for the school district, for the county, for the state,” he said.

“We were losing two coal plants, and it was going to put Arkansas in a position to import power for the first time, which meant coal prices would go up,” Jeffery said.

The quorum court also authorized $1.85 billion in revenue bonds for the project, with an annual administrative fee of $60,000 payable to the county.

“The bonds will be in the form of a loan, just like the stave mill,” Jeffery said. “We didn’t put any money in the stave mill. It costs the taxpayers nothing – it’s only going to generate revenue for the county.”

Costs “will be frontloaded to the consumer,” he said. “The county will be a bondholder for 20 years and another 12 years will be a depreciation phase. This keeps us in a position of having to import electricity at the state.”

There will be a shift in the ownership of the new plant, he said, explaining, “Arkansas Electric Cooperative is wanting to invest in power generation on a larger scale.”

The current plant is primarily owned by Entergy Arkansas with Arkansas Electric Cooperative Corporation having a smaller ownership; other owners include City Water & Light in Jonesboro, as well as the cities of Conway, West Memphis and Osceola as well as East Texas Electric Cooperative. However, Jeffery said those roles will change with AECC having primary ownership of the new plant and Entergy having a smaller share.

The current plant generates about 1,600 megawatts, and the new one will be approximately 1,500 megawatts.

While the current plant employs around 70 people, a lot of those jobs are for coal handling. Jeffery said the new plant will employ around 30-35 people.

“But there will be more taxes generated because of the cost of building it,” he went on to say. “Right now, the nameplate is 32 years, but they expect it to last longer than that.”

There will also be upgrades to the infrastructure, he said, referring to the transmission lines. “What the Arkansas Electric cooperative is doing now is doing now is taking advantage of all the existing infrastructure to get the power to the grid, etc., which that’s really good for us.”

Jeffery said with the closing of the coal-fired plants, the state was a position “to be importer of electricity for the first time. Had we imported power, it would have cost the consumer.”

With this new plant, the state will “still have affordable electricity,” he said.

“It’s a benefit to the consumers – there will not be a rate increase.”

He said company representatives have not yet decided what will happen to the current plant in Newark.

“One of the coal-fired plants Entergy has now will be retrofitted. If that goes well, in 2030 the decision will have to be made are we going to raze the plant or are we going to retrofit the plant, and that has yet to be determined,” Jeffery said.

Jeffery also said he has not heard any concerns about the new plant, which he said is expected to perform “operationally just like what is there – there will be no change” for the community.

Located at 555 Point Ferry Road, Unit 1 of the Newark plant went online in January 1983, followed by Unit 2 in December 1984, according to the AECC.

AECC also owns 35 percent of White Bluff Steam Electric Station at Redfield, about 25 miles south of Little Rock. The two units there went online August 1980 and July 1981. However, Entergy will retain the majority ownership of the Redfield plant.

Together, the four units at Newark and Redfield can generate up to 3,500 megawatts (3.5 billion watts). On a yearly average 1 megawatt is typically enough electricity to supply approximately 250 homes at any given time, according to the AECC.

For more than 10 years, Entergy Arkansas has been phasing out coal-fired power plants in response to lawsuit over a federal law known as the Clean Air Act. Entergy agreed to meet federal standards and transition to cleaner energy sources, thus the retiring of the coal plants.

Image: Independence County