TheTimesTribune.com, Corbin, KY

State News

August 13, 2013

Virginia AEP decision unlikely to affect similar case in Ky.

CORBIN — By Ronnie Ellis / CNHI News Service

A decision by Virginia regulators to deny a request by American Electric Power to transfer half of a Mounsville, W.Va., plant to its Virginia operations isn’t likely to affect a similar request in Kentucky.

AEP, through its subsidiary, Kentucky Power, is asking the state Public Service Commission to allow it to transfer the other half-interest in the Moundsville plant, which is owned by AEP subsidiary Ohio Power, to Kentucky Power while the company shuts down coal-fired units at its Big Sandy plant in Louisa.

The Big Sandy units do not have scrubbers to reduce carbon emissions while the Moundsville plant does. The cost of the transfer would be roughly $536 million, compared with $980 million to install scrubbers at Big Sandy, and would produce a rate increase of roughly 14 percent.

AEP simultaneously requested the Virginia State Corporation Commission and the West Virginia Public Service Commission to allow it to transfer the other half of the Moundsville plant to Appalachian Power, which serves customers in both states.

While the West Virginia commission hasn’t ruled on the request, the Virginia commission last week denied the request.

That decision, however, doesn’t affect the request before the Kentucky PSC regarding the Big Sandy plant, according to AEP, Kentucky Power and the PSC.

“It doesn’t impact our request before the Kentucky PSC and we’re proceeding with that request,” said Ronn Robinson, communications manager for Kentucky Power.

“We need that generating capacity to replace the retiring units and the 800 megawatts we’re losing at Big Sandy,” he continued.

Andrew Melnykovich, PSC spokesman, said the agency is aware of the Virginia ruling and also aware that West Virginia hasn’t yet ruled, but he said neither directly affects the Kentucky case.

“We’re proceeding forward with our case and will continue to do so, absent some development which would change that,” Melnykovich said.

Opponents of the move say closing the Big Sandy coal-fired units will further depress the already struggling Kentucky coal industry and devastate the local economy in Lawrence County. State Rep. Rocky Adkins, D-Sandy Hook, and Lawrence County Attorney Mike Hogan want the PSC to require the company to investigate other options that would keep the Big Sandy units operating, such as installation of scrubbers.

The Moundsville plant is located just across the Ohio River from Ohio and the Big Sandy River from Kentucky and previously operated as part of the company’s Ohio fleet.

Transferring half the plant’s assets and generating capacity to Kentucky Power does two things. It replaces nearly all of the lost generating capacity of the two coal-fired units at Big Sandy while conforming to carbon emissions standards.

But it also allows AEP to transfer power that is currently part of the company’s unregulated Ohio operations to a regulated environment in Kentucky. Ohio has ordered the company to begin competing on the open power market.

Adkins has argued that’s a key motive for AEP because regulated utility markets — while requiring state approval of rates — nonetheless allow companies monopoly service areas free from price competition.

But Robinson of Kentucky Power and Melissa McHenry, director of external communications for AEP, said Monday the decision to transfer the assets of the Moundsville plant is simply a transfer of ownership assets and the most cost-effective way for AEP and Kentucky Power to deal with emissions limits.

“We feel this is the best option for our Kentucky Power customers,” Robinson said. The company has said installing scrubbers at Big Sandy would drive up electrical rates by more than 30 percent.

Melnykovich said a final decision by the Kentucky PSC is probably a “matter of weeks rather than of days.”

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

1
Text Only
State News
  • Committee seeks explanation of selenium reg discrepancies

    A committee of state lawmakers wants the Energy and Environment Cabinet to explain apparent inconsistencies between its position and that of the U.S. Fish and Wildlife Agency on a new regulation governing how much selenium mining operations may release into Kentucky streams.

    April 22, 2014

  • Healthcare signup in state extended

    While the national health exchange established by the Affordable Care Act — known to some as Obamacare — suffered glitches, crashes and delays, the Kentucky-run exchange, Kynect, was often used as a national model.

    April 4, 2014

  • Kentucky budget passed with little debate

    The Kentucky General Assembly, divided between chambers along party lines, overwhelmingly passed a $20-billion, new two-year budget not only on time but with almost no debate.

    April 1, 2014

  • Lawmakers agree on snow bill

    Kentucky school officials, parents and students finally have what they’ve been asking for: A bill to allow them to get out of school before the summer fully sets in, even if they don’t make up some of the days they missed during the severe winter.

    March 31, 2014

  • Tensions rise during budget negotiations

    Tensions increased Friday between the Republican Senate and Democratic House over continuing negotiations on a new, two-year budget. It even got personal at times.

    March 31, 2014

  • Kentucky Power plan a potential landscape-changer

    Electrical ratepayers, local governments and those employed in the coal industry might have a hard time understanding the complicated transaction through which Kentucky Power Company is purchasing half the generating capacity of a coal-fired West Virginia plant.

    March 28, 2014 2 Stories

  • Senate passes budget with no locked-in gas tax hikes

    The state Senate on Tuesday passed its version of a two-year revenue measure, and unlike the House version, it does not lock in gas tax increases.

    March 26, 2014

  • House passes bill aimed at saving Big Sandy Plant

    Backers of a bill to require the Kentucky Public Service Commission to “reconsider” its previous order approving Kentucky Power’s purchase of a West Virginia generator say all they are asking “is for them to take a second look and look at all the facts.”

    March 26, 2014 1 Story

  • Judge: Companies can’t use eminent domain for pipeline project

    Franklin Circuit Judge Phillip Shepherd on Tuesday ruled that companies building a natural gas liquids pipeline across parts of Kentucky cannot invoke eminent domain to force private property owners to provide easements.

    March 26, 2014

  • Still no snow day solution from lawmakers

    Senate and House negotiators, working on a bill to give school districts flexibility in making up snow days, each accused the other of moving the goal posts – but it’s the local school districts who may be penalized.

    March 25, 2014