Senator Says Inaction by OGE Threatens Coal Industry

If Oklahoma Gas and Electric Company doesn’t sign a new long-term contract to buy electricity from the AES Shady Point co-generation plant in Le Flore County soon, more than 2,000 Oklahoma coal miners and truck drivers could be forced into the ranks of the unemployed, State Senator Kenneth Corn said Wednesday morning

“We’re talking about real people with mortgages to pay and children to clothe and feed. We’re talking about wiping out an entire industry in our state,” said Corn, D-Poteau.

The Senator’s comments came during a State Capitol press conference in which he was flanked by a group of coal miners and officials from AES Shady Point.

Corn said OG&E currently contracts with AES to buy all of the electricity produced at the plant near Panama. The plant produces electricity by burning coal, including 75 percent of all the coal mined in Oklahoma.

“It’s the only power plant in the state with the scrubbers to burn the high-sulfur coal dug out of the mines in southeastern Oklahoma. If AES can’t get a new contract with OG&E soon, it won’t be able to extend its contract with the coal mining companies and without that contract, the coal miners and the truckers who transport the coal to the plant will be out of work,” Corn said.

The Senator said the AES Shady Point plant itself is not at risk. Company officials believe they can sell the electricity elsewhere on the open market, but doing so would mean making an investment in new transmission equipment.

The current contract between AES Shady Point and OG&E expires in 2007.

“What AES needs is some certainty so it can plan for the future. If that future includes a new long-term contract with OG&E, then AES can extend its contract with the Oklahoma coal miners. If it doesn’t or if the future remains uncertain, AES won’t be able to renew that contract and thousands of miners and truck drivers will lose their jobs. Open market energy sales simply can’t provide the company with the certainty it needs to extend its contract with its Oklahoma coal supplier,” Corn said.

Corn said it is in the best interest of Oklahoma ratepayers for OG&E to renew the contract because it is as much as five times less expensive to produce electricity in coal-fired power plants than with natural gas.

“And with the price of natural gas continuing to rise, the cost savings of coal is only going to increase,” Corn said.