New York (Platts)--14Aug2007

The Oklahoma Supreme Court last week decided not to hear a case filed by a
large independent gas producer and others to block the construction of a
massive new coal-fired power plant.

Deputy Court Administrator Mike Mayberry told Platts that the high court on
August 7 declined to hear the case under original jurisdiction, and declined
further comment. The case filed by Oklahoma City-based Chesapeake Energy and
an environmental and community group, the Quality of Service Coalition,
claimed that the Oklahoma Corporation Commission "was acting without
jurisdiction," in conducting a rate hearing last month on the proposed 950-MW
Red Rock Power Plant. 

Plans call for the plant, a joint project of Oklahoma Gas and Electric, Public
Service of Oklahoma and the Oklahoma Municipal Power Authority, to be built on
the site of the existing OG&E-owned and operated Sooner plant, in Red Rock,
Oklahoma (PCT 6/29). The OCC held a hearing under a 2005 law that gives
electric utilities the right to request a rate hearing on a proposed plant
rather than have to wait until a plant is in operation.

The developers of the proposed Red Rock plant plan to fuel the plant with
low-sulfur coal brought into the state from Wyoming's Powder River Basin.
Chesapeake, a leading gas producer, opposes the construction of new coal-fired
power plants in Oklahoma, claiming power should be generated by burning gas,
which the state produces in abundance.

Administrative Law Judge Maribeth Snapp is expected to issue a report to the
OCC on August 21, on whether to proceed with permitting the proposed plant and
the commission is expected to take up the issue early next month.

More skirmishes ahead 

Spokesmen on both sides of the issue acknowledged that the high court's
decision was simply a small skirmish in an ongoing war over the future of
power generation in the state. "We're pleased by the court's decision," OGE
spokesman Brian Alford told Platts. "We feel as though the decision does rest
with the Oklahoma Corporation Commission."

He added that the OCC "has had the authority to pre-approve projects for
decades," and the 2005 law that the plaintiffs were challenging, House Bill
1810, "simply put a process in place to allow the commission to execute that
authority." 

-- Jim Magill, jim_magill@platts.com