The head of the commonwealth's utility regulator had some critical words Wednesday about a Kentucky Power proposal.
A Kentucky Power official told the state Public Service Commission a $51 million federal grant would help offset a cooling tower project’s cost and lower the expense for electricity customers.
PSC chair Angie Hatton, though, was not as enthusiastic about the grant.
“I don't think it will be surprising or a shock that this is a pretty unpopular project with ratepayers,” she said.
Kentucky Power and Wheeling Power jointly own Mitchell power plant in West Virginia. They’re seeking approval in both states to build a replacement cooling tower.
The PSC recently approved a rate increase for Kentucky Power, but residents and state and local officials opposed the increase. Electricity customers in Eastern Kentucky pay some of the highest bills in the region.
Last week, the PSC initiated an independent audit of Kentucky Power’s management and operations.
Amy Elliott, vice president of regulatory and external affairs for Kentucky Power, defended the project and the 55-year-old Mitchell plant.
“We still feel that it is a good plant. It's a good resource for our customers,” she said. “It's not abnormal for the aging coal plants to need updates and continued investments.”
One of the plant’s two concrete cooling towers is failing structurally. Kentucky Power has received a $51 million U.S. Department of Energy grant to help pay for the replacement.
Kentucky Power purchased its 50% share of Mitchell more than a decade ago to replace coal generation at the Big Sandy power plant in Lawrence County.
The unpopularity of that decision lingers in the region today. Mitchell is in another state, may or may not burn Kentucky coal and doesn’t employ the state's workers or provide tax revenue to Kentucky communities.
Eastern Kentucky coal jobs and production have tumbled in recent years, and the region has been losing population.
Other company officials testified Wednesday the cooling tower failure is a safety issue. A warning system is in place at the plant when winds reach speeds of 50 mph or more.
That system has been activated multiple times, they said, and tells employees to avoid an “exclusion zone” around the tower.
Kentucky Power considered repairs or a partial demolition, but those options are costly and complicated, officials have testified.
A Sierra Club witness testified Mitchell should be retired and replaced with a combination of natural gas, renewables and battery storage. That, she said, would be a less risky option in the long run for Kentucky Power customers than continuing to invest in an aging coal facility.
Hatton acknowledged, though, Kentucky and West Virginia lawmakers have made it exceedingly difficult to retire coal generation.
