The opinion of the Arkansas Court of Appeals reversing the Arkansas Public Service Commission’s approval of authority for AEP/Southwestern Electric Power Co. to build a $1.6 billion baseload power plant in Hempstead County is expected to be appealed to the full Arkansas Supreme Court.

A SWEPCO announcement Monday of a press conference in Little Rock states the purpose of the event is “to appeal reversal of CECPN permit for the John W. Turk Power Plant by Ark. Court of Appeals.”
A short statement included in the announcement explains, “The Turk plant holds the best future for long-term reliability and affordable power for SWEPCO’s customers. The current construction work force includes 723 people, 400 of those from four Arkansas counties. Over 1,000 people will be at work when construction peaks on the way to its projected completion date of late 2012.”

SWEPCO President and COO Paul Chodak will make the announcement at the Arkansas State Chamber of Commerce building, according to the statement.
The Court of Appeals ruling is based upon a literal application of the wording of a state statute.

The court agreed with private hunting clubs and landowners that a key issue is the wording of Arkansas Code Annotated 23-18-502, commonly known as the Utility Statute, that:

“The General Assembly, therefore, declares that it shall be the purpose of this subchapter to provide a forum with exclusive and final jurisdiction, except as provided in section 23-18-505 and 23-18-506, for the expeditious resolution of all matters concerning the location, financing, construction, and operation of electric generating plants and electric and gas transmission lines and associated facilities in a single proceeding to which access will be open to individuals, groups, state and regional agencies, local governments, and other public bodies to enable them to participate in these decisions.”

The court said the PSC violated the “single proceeding” language of the statute by conducting a separate docket for SWEPCO’s application to  build the John W. Turk, Jr., Power Plant near Fulton, and separate dockets for construction of transmission lines.

The court denied the PSC’s contention that public utility proceedings acquire a language of their own which is different from “day-to-day” lanauge usage.
“Accepting that the plain language of the statute usually means something different from the day-to-day usage understood by our citizens would controvert the purpose of the legislation,” Associate Justice Karen Baker wrote for the court.

 “Accordingly, we will not interpret it to mean anything other than what it says... The statute says that its purpose is to provide a forum for the expeditious resolution of all matters in a single proceeding for generating plants and transmission lines, not one proceeding for generating plants and another for transmission lines.”
The court also rejected the premise by the PSC that such practices had never been successfully challenged in court.

“The mere fact that the practice has gone unchallenged cannot create a presumption that it is proper,” Baker wrote.
The court also chided both SWEPCO and the PSC for attempting to create an exception in ACA 23-18-502 by arguing that “major utility facility” defined the plant itself and the transmission lines each in ACA 23-18-503 as a distinct “major utility facility.”

“The term ‘major utility facility’ is not used in section 23-18-502,” the court stated. “The legislature’s specific use of the terms ‘generating plants’ and ‘transmission lines’ makes the definition of ‘major utility facility’ irrelevant for construing section 23-18-502(e) because the legislature used more precise terminology.”

Consequently, the court said that, “Piecemeal consideration of all the matters concerning a generating plant and its transmission lines corrupts the spirit and letter of the law.”
The court said the PSC, “...failed to resolve all matters in a single proceeding. Accordingly, we reverse the grant of the CECPN application to build the Turk Plant and, if SWEPCO chooses to reapply for a CECPN, direct the APSC to conduct a single proceeding in compliance with Arkansas Code Annotated section 23-18-502.”

The court also found that the PSC’s finding that SWEPCO needed new power supply resources was sufficient grounds to determine that the company should build the Turk Plant to fulfill that need.
“SWEPCO and the Staff of APSC argue that the separate Needs Docket was required to be filed pursuant to the Regulatory Reform Act of 2003, codified in part at Arkansas Code Annotated section 23-18-506 (Supp. 2007),” the court wrote. “This Act solely addresses the planning process for electric-utility resources, not the application for a specific facility, which is governed by the Utility Act.”

Consequently, the court said that while the PSC’s finding in 2006 that SWEPCO demonstrated a need for additional power resources, “...may be some evidence of SWEPCO’s need for the Turk Plant, Order No. 3 does not satisfy the Commission’s duty to determine the basis of the need for the Turk Plant under the Utility Act.”

The court said the PSC should have considered the possibility of other options such as purchased power or retooling existing plants.
The court also wrote briefly concerning the site selection for the plant, noting that a study commissioned by SWEPCO’s parent company, American Electric Power Co., evaluated nine sites and chose the Hempstead County site, “...because it was large enough to accommodate the facility, had an adequate water supply, had nearby rail access, and had a property owner willing to sell.”