State regulators have given Kentucky Power the go-ahead to build a new cooling tower at its Mitchell coal plant in West Virginia.
Late Friday, the Kentucky Public Service Commission approved the utility’s plan to replace a structurally compromised concrete tower with a mechanical draft one.
The PSC imposed a few conditions, however, including that the West Virginia Public Service Commission also approve the project, which appears likely.
The Bluegrass State regulator also requires Kentucky Power and its sister company, Wheeling Power, receive a $51 million grant from the U.S. Department of Energy to offset the $191 million total cost.
The grant means electricity customers will see less of the total cost appear on their bills.
Sarah Lynch, a spokeswoman for Kentucky Power, said in a statement the company is glad to receive a favorable decision for what she called an important investment.
The project is needed to replace a 55-year-old concrete cooling tower that is at risk of failure.
Late last year, the Kentucky PSC approved the utility’s continued 50% ownership of the Mitchell plant beyond 2028.
Mitchell’s future was less certain just five years ago, when the PSC rejected Kentucky Power’s plan for environmental upgrades. Instead, West Virginia’s commission approved the upgrades to be paid for by that state’s electricity customers.
Kentucky Power announced the $51 million federal grant in June.
The company acquired its 50% share of Mitchell more than a decade ago to replace coal generation at the Big Sandy plant in Lawrence County. At the time, Kentucky Power determined that to be a less expensive option than installing $1 billion in pollution controls at Big Sandy.
In recent years, though, Kentucky Power’s 162,000 customers have paid some of the highest bills in the state.
The Kentucky PSC launched an investigation of the utility's management and operations in July.
The region it serves has lost population and large industrial customers. Data centers, such as one proposed by TeraWulf near Ashland, could help reverse the trend, the company has said.
Kentucky Power recently reached an agreement with TeraWulf to offset $100 million in residential winter heating bills over 10 years, starting in 2029. Customers would save $25 a month for three months each year.
