Oklahoma Gas & Electric (OG&E), a utility subsidiary of OGE Energy, has announced that it will acquire the Shady Point power plant near Poteau, Oklahoma, and the Oklahoma Cogeneration plant in Oklahoma City, subject to regulatory approval, to meet customers’ energy needs.
The plants will replace capacity currently provided by power purchase contracts, which will expire in 2019.
Currently owned by AES Corporation, the Shady Point facility is a 360MW coal and natural gas-fired plant, which utilizes circulating fluidized bed boilers that reduce emissions due to their design features and emissions controls.
Oklahoma Cogeneration facility, a 146MW natural gas-fired combined-cycle plant, is owned by Oklahoma Cogeneration.
Oklahoma Gas & Electric will pay approximately $53m for the two plants, which serve OG&E customers.
The company expects to significant reduction in its power plant emissions in 2019 from the 2005 levels. It said that the sulfur dioxide emissions are expected to be lower by nearly 90%, nitrogen oxide by 75% and carbon dioxide (CO2) by approximately 40%.
The company attributes its lower emissions to actions taken to meet the federal Regional Haze mandates, which include converting two units from coal to natural gas at the Muskogee Power Plant; adding two, emissions-reducing scrubbers to coal-fired units at the Sooner Power Plant; and modifying burners at the generation plants.
The acquisition is expected to save customers $40m to $50m per year and will help mitigate the negative economic impact that the closure of Shady Point would have had in the region.
According to estimates, the regional economic impact of the loss of the Shady Point plant would have been about $60m per year.
OG&E said that it will seek preapproval of the acquisitions from regulators in Oklahoma and Arkansas.
OGE Energy chairman, president and CEO Sean Trauschke said that the integration of Shady Point into its fleet is expected to change how the plant operates and further lower emissions.
He said: “We expect operational changes to reduce coal use by more than 50 percent initially, and we’ll continue to explore opportunities to reduce costs and emissions not only at Shady Point, but also systemwide.”