A.E.P. Has Plan to Close Kentucky’s Big Sandy Power Plant

The following is an excerpt from an article in:


The New York Times
Thursday, December 20, 2012

A.E.P. Has Plan to Close Kentucky’s Big Sandy Power Plant

By ERIC LIPTON

WASHINGTON — Coal took another serious hit Wednesday — in the heart of coal country.

American Electric Power, or A.E.P., the nation’s biggest consumer of coal, announced that it would shut its coal-burning boilers at the Big Sandy electric power plant near Louisa, Ky., a 1,100-megawatt facility that since the early 1960s has been burning coal that was mined locally.

Big Sandy this year became a symbol of the plight of the coal industry nationwide. Strict new environmental regulations are forcing large utilities to spend billions of dollars to retrofit old coal-burning plants or shut them down, replacing them in most cases with equipment that uses cleaner-burning natural gas.

A.E.P., which is based in Ohio, has repeatedly changed its mind over what to do with Big Sandy, a big employer in eastern Kentucky, both at the 120-employee plant itself and in the Appalachian-area coal mines that feed it 2.5 million tons of coal each year.

In May, the power company withdrew a plan to spent $1 billion to retrofit Big Sandy so that it could continue to operate. But that would have required a 31 percent increase in electricity rates for eastern Kentucky residents.

On Wednesday, A.E.P. announced that it would close both of the coal-burning furnaces at Big Sandy in 2015, but left open the possibility that one of the units would be retrofitted to use natural gas. Area residents, if the Kentucky Public Service Commission approves the plan, would see an 8 percent increase in their electricity rates — to replace Big Sandy’s production with electricity from West Virginia — much less than the earlier plan.

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