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PSC sets hearing here on Ky. Power rate hike request



Kentucky Power Company customers will have a chance to tell the state Public Service Commission (PSC) what they think about a proposed rate hike during a public meeting in Whitesburg early next month.

The meeting, which will include an hour-long information session by PSC representatives, is set for 12:30 p.m. on April 5 at the Letcher County Central High School auditorium. Public comments will be heard beginning at 1:30 p.m.

Kentucky Power, a subsidiary of Columbus, Ohio-based American Electric Power, is requesting permission from the PSC place an environmental surcharge on customers to pay for construction of a $940 million “scrubber” system and associated facilities to control air emissions from an 800-megawatt generating unit at the company’s Big Sandy power plant located near Louisa. Kentucky Power says the dry flue gas desulfurization (DFGD) system is required to comply with federal environmental rules affecting utilities that burn coal to generate electricity.

Kentucky Power Company, which has about 173,400 customers in Letcher County and 19 other counties in eastern Kentucky, is under a federal court order to install the scrubber by the end of 2015 if the company intends to continue burning coal at its Big Sandy plant near Louisa. Kentucky Power plans to retire an older, 278-megawatt coalburning unit at Big Sandy at the end of 2014.

The company estimates that total monthly electric bills for a typical residential customer would increase by about $31 or 30 percent by 2016 if the project is approved. The company estimates that the monthly bill for a residential customer using 1,000 kilowatt-hours per month would increase from about $98 to about $129 in 2016. Individual bill increases would vary with electric consumption. A kilowatt-hour is the amount of electricity used by a 100- watt light bulb in 10 hours.

At the public meeting in Whitesburg, PSC representatives will conduct an information session to explain the environmental review process and the legal basis for the surcharge, which applies only to electric rates. Since 1994, Kentucky laws and regulations have allowed utilities to recover environmental compliance costs separately from general rates. The costs are recovered through a surcharge that appears as a separate item on electric bills.

Meetings are also scheduled to begin at 12:30 p.m. on April 4 at the Lawrence County Community Center in Louisa and at 5:30 p.m. on April 4 at the Pikeville High School auditorium. A public meeting is set for 5:30 p.m. at the Perry County Central High School auditorium on April 5.

The PSC presentation will be available on the PSC website, psc. ky.gov, beginning April 4.

The PSC will conduct a formal evidentiary hearing in the case at 10 a.m. on April 30 in Frankfort. The public meeting will be broadcast live on PSC’s website.

A scrubber or DFGD system uses chemical and mechanical processes to remove sulfur dioxide, or SO , produced by burning

2coal. It does this by “scrubbing” the gas produced from coal combustion when making electricity. Scrubbers can remove up to 98 percent of the SO from the flue gas stream. Scrubbers2 have been shown to remove oxidized mercury as well, Kentucky Power said in an earlier news release.

Kentucky Power announced plans last summer to convert the Big Sandy plant to natural gas, but later decided to stick with coal, most of which is supplied from mines in Appalachia.

“Kentucky Power looked long and hard at the best way to meet its environmental obligations at Big Sandy Plant and after much study and analysis, the scrubber system emerged as our least-cost option,” Greg Pauley, president and chief operating officer of Kentucky Power, said in January. “By investing in the plant and the new scrubber system, we will be able to comply with environmental regulations as well as retain local jobs. It will also enable Big Sandy Plant to continue burning millions of tons of coal each year and ensure that Kentucky Power remains a large part of the area’s economy for years to come.”

Written comments concerning the proposed surcharge will be accepted through the conclusion of the evidentiary hearing. Comments may be mailed to the PSC at P.O. Box 615, Frankfort, Ky., 40601 or faxed to 502-564- 9625. Comments may also be submitted through the PSC’s website or submitted in person at the public meetings or at the PSC office.



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