By Zack Stovall
Arkansas News Bureau
LITTLE ROCK — In an effort to trim costs, the federal Office of Management and Budget has slated an Arkansas hydroelectric plant renovation project to be among the first projects to be cut.
Corps officials said Tuesday the Ozark-Jeta Lock and Dam Power Plant in Franklin County, 35 miles east of Fort Smith, will fall short of the cost-benefit return requirement that the Obama administration has set to keep projects going.
The administration’s cutoff point is a $2.50 return for every federal dollar spent, Corps officials estimate the Arkansas plant project would return about $1.70.
Funds for the project have been obligated through the end of the fiscal year and about four months into FY2010.
Corps officials say that if scrapped, the project would be a waste of roughly $50 million already spent on the $92 million renovation project.
“Shutting down saves taxpayers money, but at the same, you’re not going to get the long-term benefits of having a fully functional hydroelectric plant,” said P.J. Spaul, spokesman for the Corps Little Rock District.
Spaul said the project lacks nearly $32 million in renovations to the remaining three units at the site. The site is supposed to have five fully functional units by the end of renovation, and the Corps estimates a loss of $8 million annually from those flowing, untapped resources from the Arkansas River.
The New York Times reported on its Web site Tuesday that reimbursements to utility ratepayers in the amount of $20 million would make the project roughly $4 million more expensive to shut down than to keep open. Lee Beverly, manager of the renovation project, said those numbers are inaccurate.
“That $20 million has already been paid back to the customers who paid the money for the services in the form of electricity they received,” Beverly said. “There’s no federal obligation to pay anything back.”
Beverly added that after the federal funds run out, the Corps is looking at other methods to complete the project by its 2014 deadline.
“Between now and then, Congress could appropriate additional funds and stimulus money to complete it. We’re also considering customers to chip in to keep funding the project,” he said.
Beverly said some of the major customers of the hydroelectric plant include the cities of Jonesboro, Conway, the Arkansas Electric Energy Cooperative and the City of Springfield, Mo.
U.S. Rep. John Boozman, R-Rogers, whose district is home to the hydroelectric plant said shutting down the plant “makes no sense whatsoever.”
“You’re going to have a situation where you’re going to have huge turbines laying out on concrete, ruining under the rain and elements,” Boozman told the Arkansas News Bureau.
“We’d be worse off than what we were, the ratepayers and our ability to produce electricity, as a result of spending $50 million to $60 million totally wasted. We’d have absolutely nothing to show for it,” Boozman said. “We’re working hard to make sure this gets reversed. Ratepayers all over Arkansas would pay.”
