Kentucky Power gets state permission to build a new cooling tower at coal-fired power plant

Kentucky’s utility regulator has granted permission to investor-owned utility Kentucky Power to build a replacement cooling tower and partially demolish an aging existing tower at a coal-fired power plant the utility co-owns near Moundsville, West Virginia. 

In a Friday order, the Kentucky Public Service Commission wrote the Eastern Kentucky electric utility could move forward with the $191 million project contingent in part on the utility being able to use a $51 million federal grant it received to cover a portion of the project’s costs. 

Kentucky Power could seek to recover the costs of the project from ratepayers in a future rate case or through another mechanism. The move comes as the utility is under scrutiny, including through an ongoing audit by the commission, over long-standing criticism that the utility hasn’t adequately planned how to serve ratepayers in a 20-county region of Eastern Kentucky that has among the state’s poorest counties and among the highest monthly electricity bills. 

“Kentucky Power presented credible evidence that the cooling tower no longer meets design loads, presents a safety hazard, and that there is a risk of catastrophic failure in an extreme weather event,” the commission wrote. 

The commission is requiring Kentucky Power to provide updates on the status of the project’s construction and demolition, along with the status of the grant the utility received in June. 

Kentucky Power had sought the project because of the deteriorating condition of an existing cooling tower at the power plant, threatening to put a part of the power plant’s capacity out of service as it tries to meet requirements to be a part of the regional PJM power grid. In an emailed statement Monday, Kentucky Power spokesperson Sarah Lynch said the utility could “now move forward with this important investment, supporting reliable service for customers while maintaining the lowest reasonable cost.”

The regulator wrote it was “reasonable” to assume Kentucky Power would receive the U.S. Department of Energy grant, pointing to July testimony from the utility that it was finalizing a grant agreement. The costs of the project are to be split between Kentucky Power and Wheeling Power, both subsidiaries of the Ohio-based American Electric Power. The power plant is more than 50 years old and is slated for retirement in 2040. 

Lawyers for the environmental group Sierra Club wrote in an August filing that it didn’t oppose the project with the addition of the federal grant but that the “award should not completely paper over the Company’s serious analytic failures” and should not be used to prevent future discussions of new power generation. 

In response, attorneys for Kentucky Power wrote that a requirement suggested by the Sierra Club that the utility model electricity generation needs for future requests it makes — a requirement the commission did not go along with — was an “onerous addition” and not necessary.