Coal Plant's Rejection Puts New Emphasis On Conservation

Sunday, October 21st 2007, 7:47 pm

By: News On 6

OKLAHOMA CITY (AP) -- After decades of showing Oklahomans how electricity can brighten their homes and their lives, power generators are learning to deliver a new lesson to their customers -- how to use less of the electricity they produce.

Major utilities like Oklahoma Gas & Electric Co. and Public Service Company of Oklahoma are making energy efficiency and conservation top priorities following the Oklahoma Corporation Commission's rejection of their request to raise customer rates to help pay for a proposed 950-megawatt, $1.8 billion coal-fired power plant.

The utilities said they needed the massive Red Rock plant to keep up with Oklahomans' growing appetite for energy to power an expanding array of electronic devices and appliances. Using coal as a fuel would diversify their fuel mix and help keep consumer costs low.

But opponents howled that a coal-fired plant could contribute to global warming and create health risks. They also warned that costs could escalate to more than $2.5 billion before the plant finally went online.

Following weeks of hearings and testimony by utility officials, the three-member commission decided 2-1 earlier this month that the utilities had not adequately explored other options and ordered them to implement so-called "demand-side management" energy conservation programs to lower demand.

"There was more to be done," said Commissioner Bob Anthony, who supported the Red Rock proposal but agreed that electric utilities need to stress conservation to their customers.

"These programs will help control the growth in demand," Anthony said.

Commissioner Jim Roth said Oklahoma ranks 44th in the nation in energy efficiency investments by state utilities.

"They make money off of building and selling power. They don't make money off of diminished need," Roth said.

The utilities got the message. OG&E has begun mailing its customers $1-off coupons for fluorescent light bulbs, which use 75% less electricity than ordinary incandescent bulbs, and brochures containing dozens of tips on how to lower energy costs and save money.

"It's something we have been ramping up," OG&E spokesman Gil Broyles said. "We're doing a lot. And I think what we're doing is higher profile."

PSO spokesman Stan Whiteford said the utility will submit a demand-side management proposal to the commission by December that will offer tips for saving energy to all of the utility's customer classes, including high-use industrial customers and smaller commercial and residential customers.

But the utilities said conservation will not save enough electricity to meet the state's growing needs and that new power plants must be built within the next five years.

"The idea for an increasing emphasis in conservation is something the public is going to see more of, but we simply cannot conserve our way out of the problem," Broyles said. "People are building bigger houses. People have more electronics. People's appetite for electricity is continuing to grow."

The Corporation Commission agrees. All three members accepted expert testimony during the Red Rock hearings that PSO will need 450 additional megawatts of baseload power by 2012 and OG&E will need 300 more megawatts.

"I don't think we can meet the state's energy needs with conservation alone. I think we're going to need more generation," Corporation Commission Chairman Jeff Cloud said.

Conservation programs already implemented by OG&E conserve 145 million kilowatt hours of electricity a year, enough to power 11,000 households and roughly 3% of the utility's total generating capacity of 6,200 megawatts. But OG&E's demand rate is growing by more than 100 megawatts a year.

"We've seen record energy growth in our service area for seven years in a row. They know we need to generate more energy," Broyles said.

The utilities have abandoned plans for the Red Rock plant. But spokesmen said new coal-fired plants may be proposed as the utilities consider how best to power Oklahoma. Other alternatives are more wind farms as well as natural gas- and nuclear-powered generating plants.

Although 60% of OG&E's generating capacity is fueled by natural gas, 70% of the electricity it actually produces is fueled by less-expensive coal because the utility uses its coal-fired plants more to keep costs down, Broyles said.

The result is that OG&E's rates are 24% below the national average.

The utility also plans to expand its wind-power program. Already generating 170 megawatts with giant wind turbines in western Oklahoma, OG&E plans to produce a total of 600 megawatts of wind power in five or six years, Broyles said.

Neither OG&E nor PSO is seriously considering a nuclear power plant, although officials say nuclear-generated power may be part of the state's long-term power needs.

"Whether or not nuclear fits in the long-range plans is still to be determined," Whiteford said. The lengthy design and permitting process for a nuclear plant would prevent it from coming online until at least 2020, he said.

Anthony said he supported the Red Rock proposal because it would save ratepayers money. An administrative law judge who studied the plan found that, compared to a natural gas fired plant, the coal-fired plant would have saved ratepayers $5.5 billion over the plant's 40-year life.

"In the best interest of Oklahoma residential and commercial customers, coal-fired generation must continue to be pursued in Oklahoma," Anthony said.

"Proven reserves of coal are so strong that we're going to have to have that as part of our future," Roth said. "The question is at what cost."

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7/9/2007 Environmentalists Speak Out Against Proposed Coal-Fired Power Plant

7/10/2007 Chesapeake Asks Supreme Court To Halt Coal-Fired Power Plant Hearings

8/21/2007 Judge Backs Coal-Fired Plant

8/22/2007 Opponents Of Coal Fired Plant Suffer Setbacks

9/2/2007 Coal-Fired Plant Stirs Debate Over Environmental Cost

9/6/2007 OG&E Protests Meacham Ads On Plant Controversy

9/10/2007 Coal Plant Application Rejected

10/11/2007 Order Denies Advanced Funding For Coal-Fired Plant