OKLAHOMA CITY – The Oklahoma Corporation Commission (OCC) voted 3-0 in favor of OG&E to purchase the AES Shady Point (AESSP) coal plant in SE Oklahoma near Poteau and the Oklahoma Cogeneration gas plant located near Oklahoma City.
Both plants were selected as winning bids in OG&E’s recent Request for Proposals (RFP) that included 19 bidders who submitted 94 proposals. The 94 bids included all types of electric production including natural gas, coal, wind, solar and battery storage. All were reviewed for consideration. The total purchase price for the two winning projects combined is $53 million.
Now that the hearings have concluded and the OCC voted unanimously in favor of the purchases of the two plants, one of the parties that participated in the RFP bid process, the ONETA plant owned by LS Power and represented by Oklahoma Energy Results (OER), is threatening to file a possible stay on the Commission’s final decision.
Phillips 66 (formerly called Conoco Phillips) is also represented by OER and is the largest consumer of electric from OG&E involved in the case.
If OER does file a stay, this will delay the sale of the two plants and affect hundreds of rural employees going back to work and vendors not providing products or services.
“This is nothing more than a power plant who did not meet the RFP bid specifications trying to bully their way to victory,” said Lundy Kiger, R-Poteau.
In consideration now of filing a possible stay with the OCC, OER in their final attempt in a hearing last week told commissioners the OG&E RFP process wasn’t transparent, open or fair.
“This couldn’t be further from the truth,” Kiger said. “OG&E went beyond the requirements to ensure fairness and transparency in the entire RFP process.
“The OG&E RFP was for capacity only, and did not include energy, because the Southwest Power Pool (SPP) that power is bid into accepts bids only for capacity (electric), and not energy (fuel) or maintenance recovery. So it only makes sense that OG&E would bid their RFP to reflect the same criteria everyone falls under with the SPP."
“As a long-time former employee of AES Shady Point (retired January 31, 2019, when the AESSP contract with OG&E ended) and who participated directly on the AESSP RFP team, we worked very hard as a company in participating in OG&E’s RFP by meeting all requirements to the letter, or we risked being eliminated from the bid process.” Kiger said.
This was the same situation and criteria for all 19 bidders as well, including ONETA, who participated and was under the same requirements to comply with all specifics of the RFP bid request from OG&E.
The ONETA plant represented by OER did not follow the bid specifications, and their bid was deemed non-compliant and eliminated.
Kiger stated, “OG&E made it very clear from the beginning in the RFP process and communicated every step of the way the need for the process to be clear, open and transparent for bidders to meet the requirements. From what I saw personally while at AES Shady Point plant and involved in the RFP process, OG&E went well beyond what was required to keep all parties and participants informed.”
The ONETA plant is a merchant facility with multiple off-takers who bid into the RFP offering a Power Purchase Agreement that did not meet the criteria. Now, ONETA through OER is complaining that OG&E was unfair and the RFP should have been offered as a Purchase Power Agreement (PPA) option in the RFP bid, Kiger said.
Kiger added, “After OG&E announced the winning bids there was also a 15 day period of which all parties were aware and any party could contest the RFP process and no one, including OER, took issue with anything related to the process used by OG&E during this time period. But now, six months later, when the two plants selected by OG&E and have been approved for purchase unanimously by the three commissioners, OER wants to complain and cry foul.”
Kiger went on to say, “If OER goes through with their threat of a stay and receives approval to proceed, this puts AES Shady Point and Oklahoma Cogeneration and all their workers in jeopardy.”
“The threat by OER puts $60 million annually at risk to the Southeast Oklahoma region alone. That affects approximately 700 direct and in-direct rural jobs related to power generation, mining, trucking, maintenance and local vendors. Not to mention, banks with home mortgages and car payments and retail stores that will be hurt,” Kiger said.
Kiger met with Phillips on Tuesday to discuss his dissatisfaction with Phillips’ participation with OER on a possible stay. Kiger is scheduled to meet again with Phillips on Monday with regulatory officials. Kiger said he will also contact LS Power who owns the ONETA facility to deliver the same message.
Kiger went on to say that AESSP is the biggest thing to happen to SE Oklahoma in the past 28 years and has helped to create thousands of rural jobs in SE Oklahoma.
“AESSP is our Google, our Amazon and our oil fields of Southeast Oklahoma,” Kiger said. “We will work hard to make sure this plant is owned by OG&E, because AESSP followed the RFP and did it right in winning the bid!”