PSC Considers Proposal to Replace Big Sandy Generation

Kentucky’s Public Service Commissioners will begin considering whether Kentucky Power should be allowed to purchase a share in a West Virginia power plant. Two days of public hearings on the matter ended today.

The commissioners will have to decide whether the move is in ratepayers’ best interest. Kentucky Power will have to replace the capacity it will lose by retiring part of its Big Sandy plant in Eastern Kentucky; it decided it would be too expensive to retrofit the plant to continue burning coal.

There are three intervenors in the case: the Sierra Club, Kentucky Industrial Utilities Customers, and Kentucky Attorney General Jack Conway. The first two groups reached an agreement with Kentucky Power; they say the settlement would hold rate increases to only 13 percent, versus the 31 percent increase that was originally proposed. The settlement also would require Kentucky Power to convert the rest of the Big Sandy power plant to natural gas, as well as invest in energy efficiency matters and put $500,000 toward economic development in the counties near Big Sandy.

Conway hasn’t signed on to the settlement; it gives the company the option to file for another rate increase in December 2014, and he says that’s unacceptable for ratepayers.

The commissioners aren’t under any time constraints to make a decision in the case. They could decide to accept the settlement, even though the Kentucky Attorney General’s office hasn’t signed on. They could reject the settlement, or accept parts of it.

Erica Peterson

Erica Peterson reports on energy and the environment for WFPL.

@ericampeterson

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