Committee passes coal plant incentive bill

Tuesday, February 5th 2002, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ Legislation that gives electricity producers a financial incentive to build coal-fired generating plants was passed by a state House committee Tuesday.

But some members of the House Energy and Utility Regulation Committee expressed concern that Rep. John Wright's measure could eventually increase the cost of electricity.

``His intentions may be good. But I'm concerned about the unintended results,'' said Rep. Dale Wells, D-Cushing.

Wright, R-Broken Arrow, said the bill would encourage electric utilities to diversify their generating plants and lessen the impact of spikes in the cost of natural gas and other fuels.

``I believe it would be prudent,'' Wright said.

Wright said all of the new generating plants being built in Oklahoma are fired by natural gas, which jumped up to a record price of $10 per thousand cubic feet in January 2001. The current price is about $2.50.

The bill would permit producers that are regulated by the Corporation Commission to use a seven-year depreciation schedule for new or upgraded coal-fired plants instead of the current 35-year schedule.

Wright said the proposal would permit investors to recoup the cost of coal-fired facilities more quickly.

But committee members as well as spectators had questions about the bill, including what the impact of the advanced depreciation schedule would be on electricity prices.

``We are concerned about the impact to the ratepayer,'' said Susie King of Conoco, Inc.

Committee members also questioned the environmental impact of coal-fired plants and the cost of scrubbers and other technology designed to clean up coal emissions.

``My concern is that it's going to increase the rates for the consumer in the long run,'' Wells said. ``Technology has improved greatly, but the cost of that is great is well.''

Wright said he believes the measure would protect companies from sudden increases in fuel costs.

``The intent is to hedge against a negative impact, not to create one,'' Wright said.

The measure, House Bill 2135, now goes to the full House for action.