Mon April 30, 2012
Kentucky Power Makes Case for Continued Coal Use at E. Ky. Power Plant
The Kentucky Public Service Commission is set to decide soon whether American Electric Power can keep burning coal at an eastern Kentucky power plant. The Public Service Commissioners heard testimony today in Frankfort.
Kentucky Power’s Big Sandy Power Plant in Lawrence County burns coal, and the company—which is owned by American Electric Power—is asking for PSC approval to install pollution controls to comply with federal regulations and continue burning coal.
Kentucky Power’s first witness—regulatory director Ranie Wohnhas—was on the stand most of the day. He says the proposal could raise rates as much as 29 percent, but it’s the most cost-effective option. Wohnhas argues that it makes financial sense for the Big Sandy plant to keep burning coal—especially when the economic impact to eastern Kentucky is taken into account.
“Customers and the workers that are in the coal mines feel that mining of coal to deliver to Big Sandy and to other places is a very important part…so they are a business working to provide their product at a reasonable price to the market,” he said.
Mike Kurtz rejected that argument. Kurtz is representing the Kentucky Industrial Utility Customers in the case and cross-examined Wohnhas.
“I’m talking about your testimony,” he said to Wohnhas. “When you told this commission that there’s $165 million infusion into the local economy, you conveniently ignored that that cost, there’s an equal cost on consumers of the exact same amount.”
The commissioners aren’t allowed to take that into account when they make their decision—only what provides reliable power at the lowest cost to ratepayers.
Recently, American Electric Power CEO Nicholas Adkins told the company’s shareholders it was interested in diversifying its generation mix, and coal would only make up about half of the fleet by 2020.
The Big Sandy hearing is expected to last for several days, and a decision is expected by mid-June.