LITTLE ROCK, Ark. (Legal Newsline) - The Arkansas Court of Appeals has overturned a regulatory decision to approve a proposed coal-fired power plant in Hempstead County.

The appeals court found that the Arkansas Public Service Commission's review of the proposed 600-megawatt plant in southwest Arkansas was inadequate.

In November 2007, the Arkansas Public Service Commission voted to grant a certificate of environmental compatibility and public need to Shreveport, La.-based Southwestern Electric Power Company for the $1.6 billion power plant.

In their appeal, those suing to block the power plant said the commission failed to consider all the parts of the Southwestern Electric Power Company's application in a single proceeding. They said that the panel instead considered the utility's need for additional power generation.

The appeals court sided with landowners opposed to the power plant. The judges ruled the commission needs to consider whether its decision to approve the proposed John W. Turk Jr. power plant was arbitrary.

"Separating the issues into three distinct proceedings subverted the clear intent of the Legislature for the (PSC) to structure a comprehensive evaluation of proposals in order to determine the economical and environmentally safe provision of utility services to the public," Judge Karen Baker wrote for the court.

In a statement, Gov. Mike Beebe's office said the Public Service Commission should rehear the case.

"If the Appeals Court decision stands, and the applicant chooses to restart this process at the Public Service Commission, Gov. Beebe encourages the PSC to give the facts of this case a full and thorough hearing and to seek input from every affected party," the statement said.

Southwestern Electric Power Company is a unit of American Electric Power.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.