Scrubber Project Worth $500 Million Approved in Oklahoma

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--For Oklahoma Gas and Electric Company (OG&E) (Oklahoma City, Oklahoma), the third time was the charm. Last month, after Oklahoma utility regulators rejected two earlier requests by the company to install scrubbers at the Sooner Lake Power Station, the Oklahoma Corporation Commission (OCC) (Oklahoma City, Oklahoma) approved installing that equipment, at an estimated cost of $500 million.

Time was running short: OG&E, the electric utility unit of OGE Energy Corporation (NYSE:OGE) (Oklahoma City, Oklahoma), is required to have the scrubbers operating by January 2019. The equipment will help bring Sooner Lake into compliance with the Clean Air Act's regional haze rules. For more on OG&E's compliance options, see December 23, 2013, article--OG&E Fine-Tunes Environmental Compliance Spending Plan. But Oklahoma regulators twice rejected compliance applications from the utility in 2015. Finally, on April 28, the OCC supported OG&E's request.

The regional haze rules are meant to improve visibility in Class 1 areas like national parks and wilderness areas. The U.S. Environmental Protection Agency (EPA) (Washington, D.C.) can require utilities to install Best Available Retrofit Technology (BART) on power plants whose emissions are determined to be impairing visibility at those areas.

Sooner Lake, a two-unit, 1,136-megawatt (MW) coal-fired power plant, came online in 1979. Some intervenors in the case wanted OG&E to close the 37-year-old plant and build a new plant fired by natural gas. But the utility, and its regulators, said scrubbing Sooner Lake was an important part of maintaining fuel diversity. OCC Chairman Bob Anthony said the order "promotes fuel diversity and power reliability while giving assurance to investors." OG&E is planning to convert Units 4 and 5 at the Muskogee Generating Station to burn natural gas. That project is scheduled to kick off construction in 2019.

In rejecting requests from other intervenors that OG&E replace Sooner Lake's baseload generation with renewable energy, OCC Vice-Chair Dana Murphy wrote, "While wind and solar are an important part of that mix and should continue to grow in Oklahoma, they're intermittent so they can't currently meet the state's critical need for electricity on a 24/7 basis. OG&E customers have already made a huge investment in the Sooner Plant. It would not be wise to lose that dependable resource or the insurance it provides."

The utility began design and engineering work on the compliance project some months ago, citing the tight timeframe imposed by the Environmental Protection Agency (EPA). According to news reports, OG&E has spent over $130 million already on pre-construction activities. If the OCC rejected OG&E's third bid to build scrubbers at Sooner Lake, it reportedly would have converted the plant to burn gas.

Last year, OG&E selected Oklahoma Power Constructors as the engineering, procurement & construction (EPC) firm for the Sooner Lake pollution-control project, which will cost an estimated $500 million. It will install dry flue gas desulphurization (FGD) equipment at Sooner Lake, located in north-central Oklahoma. Actual construction is scheduled to kick off next month.

Separate from the dry scrubbers that will be installed at Sooner Lake, OG&E is in the final stages of installing mercury-reduction equipment at that plant. The activated carbon injection (ACI) project being built there at a cost of about $25 million is expected to be finished this month.

"It's nice to see the end of litigation over the Sooner Lake regional haze compliance plan," said Britt Burt, Industrial Info's vice president of research for the global Power Industry. "Between negotiations with the EPA, several trips to the federal courts and three applications to the OCC, it looks like OG&E spent almost as much time litigating its regional haze compliance plan as it will in implementing it."

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