FERC orders hearing on power plant purchase

Thursday, December 18th 2003, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ A federal regulatory commission has ordered hearings on Oklahoma Gas and Electric Co.'s request to buy a power plant in McClain County.

The utility company had requested immediate approval to buy a 77 percent stake in the plant for $160 million from bankrupt NRG Energy Inc.

The Federal Energy Regulatory Commission said Wednesday that hearings were needed because the purchase might give OG&E undue influence over regional energy prices. A final decision is to come within 18 months.

``We're disappointed by today's decision,'' OG&E spokesman Brian Alford said. ``We haven't seen an order from FERC outlining its concerns, but we're eager to see it so we can begin the process of addressing the issue.''

The utility has said the acquisition would allow it to save its customers money by buying cheaper electricity from the plant.

Don Smith, chairman and chief executive officer of Oklahoma City's Smith Cogeneration, had filed motions with the commission saying OG&E's plans to buy the McClain plant are anticompetitive.

His company is the primary owner of Oklahoma City's PowerSmith Cogeneration Plant, which has sold electricity to OG&E for the past 14 years.

OG&E has said buying the McClain plant would allow it to stop buying electricity from PowerSmith and instead buy much cheaper power from McClain.

Smith, however, has said he can sell power from his plant at exactly the same price OG&E will pay for power from the new plant.

``From my point of view, one thing they can do to mitigate the anticompetitive nature is to continue to buy power from us,'' he said. ``If OG&E were to purchase 300 megawatts from McClain and continue to purchase 100 megawatts of power from PowerSmith at the identical costs, the ratepayer would be neutral.''