July 11, 2018
An appeals court ruled Tuesday that the Public Utility Commission of Texas was wrong in finding that SWEPCO acted “prudently” when it continued construction on a coal-fired power plant in 2010, construction that continued even after natural gas prices fell enough to put the economic viability of the plant into question.
The court opinion, on appeal from the Travis County 200th Judicial Court, stops an $83 million rate hike sought by SWEPCO, according to Law360.
The case may now be given back to the PUC for a new hearing.
The coal-fired plant is located in Arkansas.
The Third Court of Appeals in Austin ruled that the groups Texas Industrial Energy Consumers and Cities Advocating Responsible Deregulation, along with the Office of Public Utility Counsel, were correct in their assertion that Southwestern Electric Power Co. (SWEPCO), an AEP company, didn’t provide adequate evidence that it acted with prudence in deciding whether to continue with the plant.
The “prudence” standard is based on case law, indicating due diligence, precaution and good judgment.
The Office of Public Utility Counsel also noted in a reply to court briefs from the agency and SWEPCO in April that the PUC did not properly apply the legal standard for prudence when making it’s decision on the power plant, a decision which also okayed the rate increase.