Daily Independent (Ashland, KY)

November 17, 2013

Request for Big Sandy plant rehearing denied

Ronnie Ellis
CNHI

FRANKFORT — Kentucky’s Public Service Commission has rejected the attorney general’s request for a rehearing on its earlier decision to allow Kentucky Power Co. to purchase half interest in a West Virginia power plant.

Daniel Kemp, spokesman for Attorney General Jack Conway, said the order denying Conway’s request came down late Friday afternoon. He said Conway’s staff had just begun to review the order.

“We are reviewing it to determine our legal options,” Kemp said.

In 2007, KPC signed a federal consent decree to reduce emissions at its coal-fired plant in Louisa or close it by 2015. Ultimately, the company asked the PSC to let it purchase half interest in a coal-fired plant in West Virginia. which has emission reducing technology or scrubbers in order to generate power for its 173,000 customers in 20 eastern Kentucky counties.

The cost was $536 million to buy half interest in the Moundsville, W.Va., plant owned by Ohio Power and will result in an eventual 14 percent increase to rate payers. Both KPC and Ohio Power are subsidiaries of American Electric Power.

The alternative would have been to retrofit the Big Sandy Plant with scrubbers at a cost of $980 million, which would have resulted in rate increases between 26 and 32 percent. Ultimately, KPC plans to shut down both Big Sandy coal units and convert one of them to natural gas.

But the change is expected to cost the area 150 direct jobs and Lawrence County $900 million in lost property taxes for county government and local schools. It is also likely to cost more indirect jobs in the already embattled eastern Kentucky coal fields because the plant used about 2.5 million tons of coal annually.

The move was bitterly opposed by Lawrence County officials and coal supporter Rep. Rocky Adkins, D-Catlettsburg but they were not granted intervener status in the case and can’t appeal the PSC ruling.

AEP and KPC contend the move was the lowest cost option to comply with the federal consent decree and supply its customers with electricity at the lowest possible price.

Conway’s office intervened in the case on behalf of consumers and also opposed the settlement, contending KPC and AEP did not sufficiently investigate alternative and less expensive ways of providing power to its customers. Two other interveners, the Sierra Club and the Kentucky Industrial Utility Consumers, signed off on the agreement and gave up their right to appeal the order.

That left Conway’s office as the only one that could appeal the order and earlier this week, he asked the PSC to rehear the case. That request was rejected Friday.

Conway could still appeal the ruling in court.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.