Plant Construction Continues With or Without Deregulation.
not put off or dissuaded
Adj. 1. undeterred - not deterred; "pursued his own path...undeterred by lack of popular appreciation and understanding"- Osbert Sitwell
undiscouraged BY Arkansas' unraveling love affair with deregulation Deregulation
The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.
Traditional areas that have been deregulated are the telephone and airline industries. of electric rates, companies planning to speculatively produce power for the wholesale market are forging ahead with numerous projects in the state.
The state has approved the construction of 11 new merchant power plants in the past couple of years, three of which are already operating. Another four applications are being reviewed by the Arkansas Department of Environmental Quality, and Genova Power Co. of Dallas revealed plans in early November for yet another electricity-producing hummer near Tontitown.
That multiple corporations are lining up to invest billions to enter the unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing"
regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature"
2. electricity marketplace while the state shows every sign of running earnestly from deregulation is not surprising, said Sandra Hochstetter, chairman of the Arkansas Public Service Commission The Arkansas Public Service Commission (APSC) regulates the service and rates of those utilities subject to its jurisdiction in Arkansas. When it was originally created by the General Assembly in 1899, this was only the Railroads. , the body currently wrestling with the complex issue.
"There's no correlation at all" between deregulation of the retail market and the power generators' business plans, she said last week. "Those merchant plants are being built to serve the wholesale market."
PSC (Public Service Commission) Same as PUC. senior electrical engineer Clark Cotten agreed.
"I have not seen that anybody has backed out," Cotten said last week.
Many states moved in the late 1990s' to lift government constraints on the traditional public utility model of power supply, hoping that open, competition would lead to efficiencies, delivering the best product for the lowest price that the market would bear.
The Arkansas General Assembly The Arkansas General Assembly is the legislative branch of the Arkansas government. The General Assembly consists of an upper branch, the Arkansas State Senate, and a lower branch, the Arkansas House of Representatives. There are 100 representatives and 35 senators. decreed in 1999 that deregulation should take place by January 2002. The 2000-01 meltdown meltdown
Occurrence in which a huge amount of thermal energy and radiation is released as a result of an uncontrolled chain reaction in a nuclear power reactor. The chain reaction that occurs in the reactor's core must be carefully regulated by control rods, which absorb in electric rates and supplies in California, the state that led the nation into the deregulation age, brought the process to a nervous halt. But the surge in merchant power plants has not slowed appreciably ap·pre·cia·ble
Possible to estimate, measure, or perceive: appreciable changes in temperature. See Synonyms at perceptible. , even as the state backed off deregulation.
"Despite the glaring glar·ing
1. Shining intensely and blindingly: the glaring noonday sun.
2. Tastelessly showy or bright; garish.
3. failure of California's process to deregulate deregulate
To reduce or eliminate control. One of the major forces in the financial markets in the 1970s and 1980s was the federal government's decision to deregulate interest rates. its electric generation business, investment bankers Investment Banker
A person representing a financial institution that is in the business of raising capital for corporations and municipalities.
An investment banker may not accept deposits or make commercial loans. and analysts say that deregulation is a reality in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and is working elsewhere," an Oct. 25 Reuters article said.
The idea behind merchant plants is simple: Unregulated power generation companies, either spun off from existing utilities or independently formed, bet that they can produce electricity more efficiently than utilities and offer the product to the wholesalers more cheaply than the power providers can produce it for themselves.
"They are going at risk in terms of their investment," Hochstetter said. "Since they're not, utilities, they're not guaranteed a return on their costs, and they're locating in areas where there's a regional need."
In the nation's most populous pop·u·lous
Containing many people or inhabitants; having a large population.
[Middle English, from Latin popul state, several factors converged, that spelled disaster for power deregulation. Prices more than quadrupled in 2000, leading to a consumer revolt. When the state stepped in to cap rates, supplies all but disappeared, leading to rolling blackouts Rolling blackout refers to an intentionally-engineered electrical power outage, caused by insufficient available resources to meet prevailing demand for electricity. For information about accidental blackouts that are not intentionally engineered, see power outage. and enforced conservation this year. The state's three main utilities neared bankruptcy.
In Arkansas, the Legislature passed Act 234 of 2001, pushing back deregulation almost indefinitely in·def·i·nite
Not definite, especially:
a. Unclear; vague.
b. Lacking precise limits: an indefinite leave of absence.
c. . The PSC's staff recommended further delays recently, urging the commission to work with lawmakers to further amend or, preferably, to scrap the deregulation plan altogether after concluding that there would be no savings to Arkansas ratepayers in the foreseeable future.
The commission, while favoring slower, careful implementation, argued in a study several months earlier that Arkansas is not headed for a California-style disaster.
Titled "What Happened in California, or Why Arkansas Is Not California," the study, authored by D. David Staton, chief of staff to Hochstetter, noted six failures in the Western scheme:
* Unanticipated growth in demand;
* Unanticipated reductions in supply;
* Structural defects in the plan;
* Stringent environmental regulations, leading to siting difficulties for potential new plants;
* Poor execution and political miscalculation mis·cal·cu·late
tr. & intr.v. mis·cal·cu·lat·ed, mis·cal·cu·lat·ing, mis·cal·cu·lates
To count or estimate incorrectly.
mis·cal ; and
* Possible profiteering prof·it·eer
One who makes excessive profits on goods in short supply.
intr.v. prof·it·eered, prof·it·eer·ing, prof·it·eers
To make excessive profits on goods in short supply. , or "exercise of market power," by wholesale generators.
"No new large power plants have been built in California in 10 years," the report said. "The availability of imported electricity, typically about 20 percent of the California supply, has been going down due to growth, particularly in Arizona, Nevada and Washington. Probably the greatest structural defect built into the California plan is the requirement placed on utilities to purchase all of their energy needs from the daily spot market, the California Power Exchange."
Along with the knowledge gained from the California blowout Blowout
The rapid sale of all shares in a new securities offering. See: hot issue.
The nearly immediate sale of a new security issue because of great investor demand. See also hot issue. , the report claims that Arkansas would benefit from different circumstances, in almost every instance, than the Californians faced.
"While some form of exchange will most likely develop, the private sector will provide for those services," the report stated. "The commission will have no rules mandating sales into or purchases from the [power exchange]."
Arkansas is experiencing stable demand and supply, the report said, and the state has a less stringent, faster licensing process and fewer environmental hurdles, providing supply flexibility.
The PSC is working on a comprehensive recommendation on deregulation, to be delivered to the General Assembly. A hearing will be held on the matter Dec. 20 by the Joint Insurance and Commerce Committee.
"We're in the process of preparing our conclusions," Hochstetter said. "We may also be giving them legislative recommendations."
In any case, the PSC will continue to monitor any plan implemented for the next 10 years, she said.
"Only if a majority of the ratepayers benefit, would restructuring [electric rates] be in the net public interest," Hochstetter said. "That's the test that we have applied."
RELATED ARTICLE: El Dorado El Dorado, legendary country of South America
El Dorado (ĕl`dərä`dō, –rā`–) [Span.,=the gilded man], legendary country of the Golden Man sought by adventurers in South America. Giant Leads Power Plant Surge
A PROLIFERATION proliferation /pro·lif·er·a·tion/ (pro-lif?er-a´shun) the reproduction or multiplication of similar forms, especially of cells.prolif´erativeprolif´erous
n. OF merchant power generators, featuring a $1.1 billion plant in El Dorado that's on track to be the nation's largest, continues in spite of holdups in the state's deregulation plan.
The move to deregulate the traditional public utility-controlled power market has spurred construction of numerous power plants across the state. The operations are backed by unregulated companies, some spun off from utilities, that plan to produce power to sell on the open market to retail providers.
Eleven plants have been approved by the Arkansas Department of Environmental Quality. Two in Pine Bluff Pine Bluff, city (1990 pop. 57,140), seat of Jefferson co., S central Ark., on the Arkansas River; inc. 1839. It is a port and trade center for an agricultural area and has industries producing metal, wood, and paper products; machinery; electrical equipment; and and one in Fulton are already operating. By far the largest, Union Power Station broke ground Aug. 21 in El Dorado. A joint venture of Panda Energy International Panda Ethanol, Inc. is an American privately-held company that constructs, maintains and operates environmentally friendly power plants, with the name of the company a reference to the endangered Giant Panda. of Dallas and Teco Power Services of Tampa, Fla., the El Dorado power plant is set to produce about 2,100 megawatts through natural gas-fired generators in Phase I, making it the largest in the country. Phase II, also gas-fired, will add about 500 megawatts. At the peak of construction, the companies claim, 1,000 workers will be employed with a payroll of about $8.5 million. The plant will need about 65 employees once operational.
The project is "on budget and on schedule," Kyle Woodruff, Panda's vice president of engineering and construction, said last week. About 800 people are working at the site already.
"Things are moving along quite well," Woodruff said. So far, the company has completed a 42-mile 30-inch pipeline that will deliver natural gas from northern Louisiana to the plant. An intake structure to bring Ouachita River Ouachita River
formerly Washita River
River, southwestern Arkansas and eastern Louisiana, U.S. Rising in the Ouachita Mountains, it flows southeast to join the Red River after a course of 605 mi (973 km). Its lower reaches are known as the Black River. water to the plant and other, water users also is finished, Woodruff's said.
Though the Union Power Station is not scheduled for full operation until May 2003, the plant will be on line before then, Woodruff said.
"We'll have one of the power blocks operational probably mid to late summer of 2002," he said. "The first power will come out of it this summer."
Four more permits are under review by ADEQ ADEQ Arizona Department of Environmental Quality
ADEQ Arkansas Department of Environmental Quality
ADEQ Adult Equivalent . The plants, to be located in Ozark, Osceola and Newport [two facilities], would produce more than 2,500 megawatts.
And just this month, another Dallas firm, Genova Power Co. LP, said it would build a 550 megawatt meg·a·watt
n. Abbr. MW
One million watts.
mega·watt merchant plant near Tontitown. Genova, partnering with Hunt Power LP of Dallas, said the plant would open in 2004, employing about 25 people at an annual payroll of $1.6 million.
New Power Plants In Arkansas Location Output (megawatts) Final Permits Issued Union Station El Dorado 2,100 Wrightsville Power Wrightsville 510 GenPower Dell 640 CT1 Fulton 153 Pine Bluff Energy Pine Bluff 220 Hot springs Energy Hot Springs 1,240 Pine Bluff Energy 2nd Unit Pine Bluff 220 GenPower Keo 640 Hot Springs Power Hot Springs 700 AES Cypress Dell 540 Tenaska Keo 1,800 Under Review By ADEQ Arkansas Electric/Thomas B. Fitzhugh Station Ozark 170 Plum Point Energy Osceola 1,000-1,600 Duke Energy Jackson Newport 620 Newport Power Facility Newport 560 Pre-Application Genova Arkansas I Tontitown 550 Location Fuel Planned Startup Final Permits Issued Union Station Natural gas May 2003 Wrightsville Power Natural gas N/A GenPower Natural gas May 2002 CT1 Natural gas In operation Pine Bluff Energy Natural gas/oil In operation Hot springs Energy Natural gas May 2002 Pine Bluff Energy 2nd Unit Natural gas/oil In operation GenPower Natural gas March 2003 Hot Springs Power Natural gas July 2004 AES Cypress Natural gas June 2003 Tenaska Natural gas/oil May 2003 Under Review By ADEQ Arkansas Electric/Thomas B. Fitzhugh Station N/A N/A Plum Point Energy Coal January 2005 Duke Energy Jackson Natural gas May 2003 Newport Power Facility Natural gas May 2003 Pre-Application Genova Arkansas I Natural gas Summer 2004 Source: Arkansas Department of Environmental Quality.