Wed May 30, 2012
AEP to Reconsider Alternatives to Coal at Eastern Kentucky Plant
American Electric Power may have changed its mind about the future of the coal-fired Big Sandy Power Plant in Eastern Kentucky. The company has an application pending with the Kentucky Public Service Commission to install pollution controls at the plant to continue burning coal. But WFPL has learned that AEP filed to withdraw the application today.
Now, instead of moving ahead with the retrofit of the Big Sandy plant, the company plans to re-evaluate alternatives to comply with upcoming air pollution standards.
Spokesman Ronn Robinson said the company made the decision to reconsider alternatives to coal because outlooks suggest more energy capacity in the market in the next few years. “We will look at everything again,” he said. “We will look at the continued use of coal, the scrubber may stay an option, we will look at gas, we will do a total review, in light of the new energy landscape to make the decision that’s in the best interest of our customers and ratepayers.”
Earthjustice attorney Shannon Fisk represented environmental groups that intervened in the case, arguing that it would be more cost-effective to replace the plant’s capacity with a mix of other natural gas, renewable energy and efficiency measures.
Fisk called AEP’s application withdrawal a victory for both the environment and ratepayers, and said it’s a move that he hopes will be noticed around the country.
“It’s clearly not economic to retrofit this coal plant in the heart of coal country,” he said. “And that really sends a message for coal plants throughout the country, if it’s not even economic to do it in Kentucky, it’s certainly not economic to be spending hundreds of millions, even a billion dollars on aging coal infrastructure like Ohio and Michigan and Tennessee.”
The Big Sandy plant is old, by power plant standards—both units were built in the 1960s. In a December interview with WFPL, Robinson said burning coal at the plant was not only less expensive than alternatives, but also better for the economy of Eastern Kentucky.
“So what that means to the basic community is continued jobs, continued use of coal, which relates to many, many, many other jobs in that area, contributions to local tax bases as well as to other economic entities in that area,” he said.
In its original application to the PSC—filed in December—the company laid out a case for continued coal burning at the plant. In order to keep using coal, AEP proposed spending nearly a billion dollars to retrofit Big Sandy, installing advanced pollution controls so the plant could comply with upcoming federal air regulations. The plan was projected to raise residential rates by more than 30 percent.
Just this morning, a front page New York Times story laid out the difficulties surrounding the Big Sandy Power Plant and the plant’s importance to the local coal industry.
PSC spokesman Andrew Melnykovych said he couldn’t comment on the specifics of the Big Sandy case, but said generally the commission doesn’t make applicants move forward with cases with which they don’t want to go through.
Any other changes AEP proposes for the Big Sandy Plant will also have to get PSC approval. The PSC is charged to ensure the plant provides reliable power at the lowest cost to ratepayers.