Kentucky Replacing Coal with Biomass

By Anna Simet | October 11, 2013

Yesterday, the Kentucky Public Service Commission approved a 20-year contract to give Kentucky Power Co.  permission to purchase electricity from a 58.5-MW biomass plant proposed by ecoPower Generation, near Hazard, Ky.

Kentucky Power’s main impetus behind the PPA has been that it needs to replace capacity generated by its Big Sandy plant, a 1,097-MW coal-fired power plant that the utility has been mulling the fate of.

Although there’s been talk about converting the plant to natural gas—or making a billion dollar upgrade to allow the plant to continue burning coal—the Kentucky PSC just approved a plan by the utility to simply close it. However, the state attorney general opposes closing the plant—due to concerns of lost property tax revenue—and a local newspaper reports that he said he is exploring his legal options.  

But Kentucky Power is boasting the benefits this new plant will bring to the area, which includes employment of 230 people for two years, permanent employment of 30 people and creation of around 225 jobs for loggers and truckers.

Additionally, the PPA is in accordance the state’s renewable energy policy. In particular, a new bill that was signed by the Gov. Steve Beshear in March. It encourages biomass  by allowing utilities to recover costs not recovered in the existing rates of the utility for the purchase of electric power from a biomass energy facility that has received a certificate from the Kentucky State Board on Electric Generation and Transmission Siting.

The ecoPower plant has already received all other necessary permits and approvals, and is scheduled to come on line in 2017.

A shut down of such a massive coal plant is a tough sell in the heart of coal country, but the plant has been identified by the U.S. EPA as one of the most polluting in the country, so business-as-usual is just not an option.