In mid-2011, 800-megawatt unit 2 at the Big Sandy power plant near Louisa, Ky., was among the approximately 6,000 megawatts of coal-fired capacity earmarked for early retirement by American Electric Power Co., the Columbus, Ohio-based parent of Kentucky Power. Besides shutting unit 2, the company proposed converting 278-megawatt unit 1 at Big Sandy to natural gas as a way to reduce the plant’s air emissions.

But in a late 2011 about-face, the company told the PSC it wants to spend approximately $940 million on environmental controls to enable unit 2 to meet U.S. Environmental Protection Agency rules while most likely shutting unit 1. The utility proposes to install a dry scrubber system on unit 2 by 2016.

Greg Pauley, president and COO of Kentucky Power, said the utility looked long and hard at the best way to comply with government environmental regulations at Big Sandy and, after much study and analysis, “the scrubber system emerged as our least-cost option.” By investing in the plant and new scrubber system, “We will be able to comply with environmental regulations as well as retain local jobs,” he said. “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.”

Big Sandy has more than 100 full-time employees. Moreover, the company estimates that as many as 700 jobs will be created during the construction period. For Kentucky Power’s 175,000 customers, the scrubber project will not be inexpensive. The utility estimates an average residential user will pay about 31% more for electricity once the project is completed.