Due to a delay in Oklahoma, on July 28 Oklahoma Gas and Electric asked the Arkansas Public Service Commission to let it withdraw its April 13 application for authority to construct a natural gas-fired combustion turbine generation facility on property currently owned and operated by OG&E upon which the existing Mustang generating units are located.
Said the July 28 request: “OG&E has not yet received regulatory approval for the new generation units in the State of Oklahoma. OG&E seeks to dismiss the Application at this time and file for approval from the Arkansas Public Service Commission at a later date. Such approval may be sought subsequent to the rate case filing in Docket No. 16-052-U.”
OG&E was seeking approval to replace the existing Mustang generating units, two of which were retired at the end of 2015. The existing Mustang units were brought into service in the 1950s, and are some of the oldest generating units of their type and size currently operating in the U.S.
The company’s Mustang modernization plan calls for the replacement of the capacity of the current steam units at Mustang with seven natural gas-fired CTs. The installed capacity of the new CTs would be approximately 400 MW. For reliability purposes, the Southwest Power Pool requires that Load Serving Entities maintain a capacity reserve margin to ensure the utility has enough generation to serve its load, plus 12%. OG&E has determined it is prudent to replace the retiring Mustang units with new, quick-starting and flexible CTs to comply with SPP planning capacity requirements.
The planned CTs would react with greater speed in the Southwest Power Pool Integrated Market and would be able to respond to SPP dispatch signals and the uncertainty associated with intermittent renewable generation, such as wind and solar.
The total estimated cost of the modernization plan was $407.7 million. The initial annual Arkansas revenue requirement, based on this capital expenditure, would be approximately $6.7 million.