though we share some of the concern expressed by Staff and the Attorney General during the cross-examination of Mr. Grundmann and Mr. Jennings, we must conclude based on the testimony of Mr. Jennings that the Antelope Coal Supply Agreement is reasonable when compared with other contracts for the purchase of Western coal. The evidence on the question of whether Western coal or lignite is the optimal fuel for the proposed plant indicates that Powder River Basin Coal has only a slight economic advantage over Arkansas lignite. Since this analysis did not consider the secondary effects of lignite development on the Arkansas economy, lignite may well be the preferred fuel from an overall economic standpoint. The principal obstacle to the use of lignite in the proposed plant is the lead time needed to develop this alternative fuel source. Numerous witnesses on behalf of the Applicants, including Mr. Arch Pottit, Mr. William Cavanaugh, Mr. Hugh Visscher, Mr. William Ellison, and Mr. Lawrence Grundmann, testified that the use of lignite as a source of fuel for the generation of electricity is not feasible, either technically or economically, in the 1983 to 1985 time frame when the proposed plant will be needed. No evidence to the contrary was offered in this proceeding. We conclude that it would be unwise to delay the construction of generating facilities that will be needed in the 1983 to 1985 period when it is clear that lignite cannot be developed and in use by those dates. However, the cost comparisons of Western coal and lignite presented in this proceeding, the secondary economic benefits that will accrue to the state from the development of lignite, the absence of any risk of escalation in the transportation costs of lignite, and the effect of the Clear Air Act Amendments of 1977 make Arkansas lignite the preeminent choice as a fuel for future generating plants constructed by Applicants. The Commission is aware that AP&L and AECC have commissioned an intensive site specific study by Stone & Webster Engineering Corporation comparing Western coal and lignite under existing circumstances, and that AP&L and SFI are acquiring information as to the price, quality, adequacy of reserves, and possible delivery dates of lignite for use in AP&L's generating plants planned for the post-1985 period. Applicants are advised to pursue with vigor the development of lignite as a fuel source since the lead time needed for such development will not constitute adequate grounds for rejecting a lignite plant in future siting proceedings. CONFORMITY WITH APPLICABLE STATE AND REGIONAL LOCAL LAWS AND REGULATIONS Pursuant to Section 5 of Act 886, the Applicants served copies of the Application on numerous state and local officials and agencies charged with enforcing applicable laws and regulations. None of these officials or agencies has brought to our attention any laws or regulations that will be contravened by the proposed plant. Based on this absence of objections and our own necessarily limited review of applicable laws and regulations, we find that the proposed Independence Steam Electric Station conforms as closely as practical to applicable state, regional, and local laws and regulations. CONCLUSIONS Based upon the above findings, the Commission reaches the following conclusions with regard to the proposed project. (1) The Commission has jurisdiction of the subject matter and the parties in this proceeding pursuant to Act 866 of 1977. (2) The proposed Independence Steam Electric Station is needed to meet the load and energy demands of the Applicants' customers in 1983 and 1985. (3) The facility will serve the public interest, convenience and necessity. (4) Considering the nature of the environmental impact as found herein, the facility represents an acceptable adverse environmental impact, considering the state of available technology, the requirements of the customers of the Applicant for utility service, the nature and economics of the proposal and the various alternatives, if any, and other pertinent considerations. (5) Based upon the nature and extent of the probable economic impact as found herein, the facility financing method as proposed represents an acceptable economic impact, considering economic conditions and the need for and cost of additional public utility services. (6) The energy efficiency of the power production facility has been given significant weight in the decision-making process and Western low-sulphur coal is the optimal fuel choice for the proposed plant. (7) The location of the facility as proposed conforms to all applicable state, gional and local laws. IT IS THEREFORE ORDERED: 1. That the Applicants, Arkansas Power and Light Company, Arkansas Electric Cooperative Corporation, and City Water and Light Plant of Jonesboro, Arkansas, are hereby granted a Certificate of Environmental Compatibility and Public Need pursuant to Act 866 of 1977, to construct, maintain, and operate a major utility facility consisting of two coal-fired electric generating units and related cooling towers, intake and discharge facilities, and transportation and other necessary facilities to be located near Newark, Independence County, Arkansas, as proposed in this Application. 2. That such Certificate is conditioned upon Applicants' filing with the Commission an acceptable off-site monitoring program as described in Application and in this Order. 3. That such Certificate is conditioned on a reservation of the Commission's right to order Applicants to take any and all steps necessary to insure that construction, maintenance, and operation of the plant does not result in Prevention of Significant Deterioration Class I increments being exceeded in either the Upper Buffalo Wilderness Area or the proposed Lower Buffalo Wilderness Area. 4. That such Certificate is conditioned on Applicants' filing within 180 days of the date of this Order an acceptable proposal for monitoring the construction of the plant as described in this Order. 5. That such Certificate is conditioned upon the plant being designed to allow for future installation of flue gas desulphurization equipment should the Commission or some other regulatory authority order their installation. 6. That such Certificate is conditioned on reservation of the Commission's right to order the off-site monitoring program described herein converted to an Intermittent Control System should such action be deemed necessary in the future. |