The Public Utility Commission of Texas last week approved an unopposed agreement over Southwestern Electric Power Co.’s (SWEPCO) request to reconcile its 2020-21 fuel costs related to the retired Pirkey coal plant, but rejected an administrative law judge’s proposed order that found the plant’s retirement prudent (53931).
Opponents of SWEPCO’s 2020 decision to retire the plant in East Texas contended the plant still had years of useful life.
Among the opponents was Commissioner Will McAdams, who said in a memo last week that because the utility’s action was not prudent, it should not be allowed to recover carrying costs from the mine that provided its fuel.
“I understand that the prudent standard is not a high bar, but the lack of depth in the 2020 analysis, especially when you’re retiring a plant 12 years early, it simply did not sit well with me,” he told his fellow commissioners Thursday.
McAdams said SWEPCO could have re-examined its analysis after the February 2021 winter storm “exposed reliability and resiliency issues of a kind never seen before and reinforced the need for existing dispatchable generation.” He said the utility’s decision to continue with its application as if the storm had not occurred “lacks fundamental credibility and common sense.”
“Had SWEPCO acted prudently, it would have updated the analysis based on the new reliability needs of grids, the volatility of the 2021 natural gas market, increased construction costs, supply chain issues and inflation,” he said. “It tells me that SWEPCO knew what outcome they wanted to achieve and may have nudged the analysis parameters to match that.”
The plant retired last spring after 38 years of operation.
The PUC also approved a pair of amended certificates of convenience and necessity for system improvements in the lower Rio Grande Valley. (See Texas PUC Directs Tx Construction in Valley, “Board Approves $1.28B Tx Project,” ERCOT Board of Directors Briefs: Dec. 10, 2021.)
It signed off on unopposed agreements filed by South Texas Electric Cooperative (54936) and AEP Texas and Electric Transmission Texas (55001) for their proposed routes. The utilities are building new double-circuit 345-kV transmission lines and related facilities in South Texas.
