Kentucky regulators have approved a contract between an Eastern Kentucky utility and a proposed biomass plant, despite concerns from the state Attorney General and a consumer group. The biomass energy will replace a small part of the capacity from the coal-fired Big Sandy power plant, which is scheduled to be shut down by 2016.
The PSC order will let Kentucky Power buy all the power from a biomass plant that’s planned for Eastern Kentucky. Biomass energy comes from burning wood, wood scraps and other materials. It’s renewable, but also very expensive. The commission is mandated with approving the least-cost reliable option for electricity generation, but PSC spokesman Andrew Melnykovych says this case was different.
The legislature directed the PSC in a bill that was passed in the last session to essentially approve power supply contracts from biomass plants. And that is what the PSC did today, in accordance with the legislative direction.
A bill passed earlier this year gives additional weight to biomass plants. Kentucky Attorney General Jack Conway intervened in the case; he argued the benefits of the plant didn’t justify a seven percent rate increase.