The investment is needed to construct a dry flue gas desulfurization (DFGD) or “scrubber” system on the plant’s 800-megawatt electricity generation unit. The current plan for the plant’s other generating unit (the older of the two; rated at 278 megawatts) is to retire it at the end of 2014. However, the company is continuing to evaluate alternative options.
The announcement followed a formal filing of an Application for a Certificate of Public Convenience and Necessity before the Kentucky Public Service Commission which must approve the project and investment. The case seeks to recover the costs—which won’t be collected from customers until after the system is operational (sometime in 2016)—associated with building the DFGD system from Kentucky Power’s ratepayers. If approved, a Kentucky Power residential customer using 1,000 kilowatt hours per month would see an increase on his/her bill of approximately $31/month, or about 31%. Currently, that customer pays about $98/month and after the increase would pay approximately $129/month.
“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,” said Greg Pauley, president and COO, Kentucky Power. “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.”
If approved by the Commission, the DFGD project should be completed sometime in 2016. The company estimates that as many as 700 jobs will be created during the construction period, most of which will be directly used in building the DFGD system. Those jobs will have a direct, positive impact on the local and regional economies over the course of the next few years.