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Arkansas PSC to review Entergy settlement to close state's two biggest coal plants

Louisville, Kentucky — At the request of the state's attorney general, Arkansas regulators will review an agreement between Entergy Arkansas and environmental groups to close the coal-fired White Bluff and Independence power plants, a Public Service Commission official said Friday.

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On Thursday, Attorney General Leslie Rutledge called for a formal review by the PSC, saying the deal between New Orleans-based Entergy and the Sierra Club and Washington, D.C.-based National Parks Conservation Association "has not been properly vetted."

The settlement stemmed from a lawsuit that accused the utility of violating the Clean Air Act in 2009 when it performed work at 1,659-MW White Bluff near Redfield, Arkansas, and 1,678-MW Independence near Newark, Arkansas, without proper permits.

Entergy said in a statement it agreed to close White Bluff by the end of 2028 and Independence no later than 2030 because it would cost an estimated $2 billion in new environmental improvements to keep them running into the 2030s. The settlement also would put an end to expensive litigation, it added.

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But Rutledge is not certain shutting the plants is in the best interests of ratepayers. She also petitioned the US District Court for the Eastern District of Arkansas to intervene in the case as a representative of Arkansas utility customers.

The PSC already is on the case, Donna Gray, executive director of the commission's general staff, said in an interview.

"We're evaluating very carefully everything that was presented" by Rutledge, she said, "and certainly will give it a thorough review."

In terms of timing, the evaluation is open-ended, with no estimate by Gray as to its completion. "We're trying to understand all the particulars," she said.

RATE IMPACT QUESTIONED

Of prime importance to the commission is the rate impact of the coal plant retirements, she noted. Gray said it is unclear if a public hearing will be held and public testimony sought once a conclusion is reached.

Entergy has claimed ratepayers would save money by shutting White Bluff, Independence and the Lake Catherine natural gas plant in 2027, and relying more on renewables such as wind and solar.

In a statement, the attorney general said the terms of the Entergy settlement "will directly impact Arkansans' utility bills. This settlement has not been properly vetted by the Public Service Commission, my office or other agencies that have the public's interest at heart."

The settlement, she added, "commits Entergy to a number of actions that would impact plant operations at both locations over the next decade. The costs of those actions will ultimately be borne by Arkansas utility ratepayers."

Sierra Club officials could not be reached for comment Friday.

-- Bob Matyi, newsdesk@spglobal.com

-- Edited by Annie Siebert, newsdesk@spglobal.com