LOUISA, Ky. — A plan announced Thursday would spell the end of coal being burned for electricity in the Big Sandy region.
Kentucky Power is seeking proposals to replace the electric generation capabilities of its Unit 1 generator at the Big Sandy Power Plant, which is scheduled for retirement in June 2015.
The utility has long planned to shutter its older and smaller Unit 1 generator, which produces 278 megawatts of power. In its request for proposals, Kentucky Power is seeking to purchase up to 250 megawatts of power, as it seeks to evaluate the most cost-effective replacement for Unit 1. The utility is also considering converting Unit 1 to natural gas.
In December, Kentucky Power also announced plans to close its only other generator at Big Sandy, the newer, 768-megawatt Unit 2, in favor of purchasing 750 megawatts of power from an AEP-Ohio plant in Moundsville, W.Va. That plan must still be approved by the Kentucky Public Service Commission.
The plan to close Unit 2 came after Kentucky Power scrapped plans to construct a $1 billion scrubber at Big Sandy in an effort to reduce emissions from the plant. The utility later abandoned that plan, saying changes in the energy market made other alternatives more cost-effective and less burdensome to consumers. The cost of the scrubber would have been passed on to consumers, resulting in a 30 percent hike in power bills.
If both plans come to fruition, coal would cease to be a fuel for electricity generation, at least in the coalfields of Eastern Kentucky. The utility could still purchase coal-generated power from another supplier to replace Unit 1, and the Moundsville plant is also coal-powered.
The moves are expected to have a negative ripple-effect in the coal industry. The Big Sandy plant currently burns 2 million tons of coal a year to produce electricity, which will drop to zero when the plant stops burning coal.
During a hearing a year ago about plans for the now-scrapped scrubber, Pike County Judge-Executive Wayne T. Rutherford said the plant is directly responsible for 500 coal jobs in the region. If Rutherford’s estimates are accurate, those jobs now appear in jeopardy.
The request for proposal seeks eligible bidders capable of being on line by June 1, 2015, for a “bundled product” that includes capacity (megawatts), energy (megawatt hours) and ancillary services if available. The RFP is seeking proposals from suppliers who are willing to sell power through a Power Purchase Agreement (PPA), Tolling Agreement (TA), and Asset Purchase Agreement (APA) or other proposals defined by the RFP. In addition, the RFP also seeks demand-side management and cost-effective energy efficiency proposals. The RFP, as well as terms and conditions and information about submitting proposals, is available at (www.kentuckypower.com/go/rfp).
“This RFP will help us determine the best path forward to replace generation at our Big Sandy Plant Unit 1 which will be lost as a result of pending environmental regulations and agreements,” said Greg Pauley, president and chief operating officer of Kentucky Power. “These proposals will not bind Kentucky Power or AEP to any particular path at this point, but will help us evaluate our options for replacing generation to meet our customers’ needs.”
Proposals are due by June 11, and may be submitted to American Electric Power Service Corporation, Kentucky Power Company RFP Administrator, 155 W. Nationwide Blvd., Columbus, OH 43215. Questions regarding this RFP can be directed via email to 2013KentuckyPowerRFP@aep.com.
Ralph B. Davis can be reached at rdavis@civitasmedia.com.
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