By Shalina Ramirez
The Paris News

Published March 26, 2006

HUGO, Okla. — A growing need for future electric capacity is leading to the development of a new 750-megawatt power plant in Southeast Oklahoma.

Western Farmers Electric Cooperative in partnership with Brazos Electric Power Cooperative plans to construct the plant, a $1.2 billion investment. The construction site for the plant, known as Hugo 2, is adjacent to Hugo 1, WFEC’s existing plant near Fort Towson, Okla.

Hugo plant manager Charles Collier said effective utilization of the existing infrastructure benefits the upcoming project.

The new facility would utilize current coal transportation and handling systems at Hugo 1 as well as the current water system. This lowers the development costs to cooperative members, Collier explained.

The two cooperatives plan to split usage.

WFEC, whose headquarters is in Anadarko, Okla., would receive 250 megawatts from Hugo 2 and would operate and maintain the facility.

Brazos, located in Waco, would receive the remaining 500 megawatts, as a co-owner. Both cooperatives are non-profit organizations.

Collier said WFEC’s cost is expected to be about $450 million with Brazos picking up the remainder of the tab.

“They’ll pay for their share of the plant, and we’ll pay for our share of the plant,” he said.

WFEC communications coordinator Sondra Boykin said the two generation and transmission cooperatives are working together on the Hugo 2 project to build a larger coal-fired plant to achieve economies of scale that reduce the installed cost per megawatt by up to 30 percent.

“These efficiencies are compared to each organization building their own smaller, individual plants,” she said.

Project organizers say Hugo 2 should generate reliable, low-cost power that is expected to help Oklahoma attract new businesses and jobs as well as retain and develop existing commerce.

During the construction phase, slated from 2007 to 2011, an estimated 1,200 new jobs will be created.

“Once the plant goes online, approximately 50 new long-term positions will be available at the new facility,” Boykin said.

WFEC’s Hugo 1 plant consists of a 450 megawatt pulverized coal unit that burns low sulfur Powder River Basin (PRB) coal. Some 85 full-time employees work at this facility.

The Hugo 2 plant would consist of a 750-megawatt unit that will also burn low-sulfur PRB coal.

Collier said this unit is expected to meet all state and federal environmental regulations, utilizing best available control technology.

Boykin said as WFEC and Brazos began mapping out their future generation needs, several factors were carefully weighed to determine the best option of providing their membership with affordable electricity.

Coal was the fuel of choice for future expansion based on several important factors, including low-cost power, long-term price stability, abundant domestic coal reserves as well as upgraded technologies that meet stringent federal and state environmental regulations.

“Coal stability is a critical factor, as the volatility of the gas market continues to drive up energy costs across the country,” Boykin said. “This factor, when combined with the overall abundance of coal, makes it easy to see why coal should be a significant part of the fuel mix. At the current rate of consumption, America has the security of enough coal reserves to last over 250 years.”

The proposed Hugo 2 project is currently awaiting the Oklahoma Department of Environmental Quality Air permit process and Rural Utilities Service Environmental Impact Statement process, both expected later this year.

This will be followed by the development and execution of project engineering, procurement and construction contracts. Construction is slated for 2007 with start-up and commissioning in 2011.

WFEC, incorporated in 1941, is governed by 19 distribution cooperatives that serve approximately two-thirds of rural Oklahoma and Altus Air Force Base.

It operates its own control area and has network agreements with Southwestern Power Administration, American Electric Power and Oklahoma Gas and Electric for load within their areas.

Brazos incorporated in Texas in 1941 and is governed by 17 distribution cooperatives serving 68 counties.

It owns, operates and maintains more than 2,559 miles of transmission line and is interconnected with 16 Texas transmission and distribution entities.