Caption: Big Sandy Power Plant in Kentucky
A judge affirmed a Kentucky Public Service Commission ruling that approved a utility’s plan to buy half of a 1,560-MW coal-fired power plant in West Virginia.
Franklin Circuit Court Judge Thomas Wingate rejected an appeal by Kentucky Attorney General Jack Coway that wanted to overturn the Commission’s approval for Kentucky Power to buy a 50 percent stake in the two-unit Mitchell Plant in West Virginia.
“The AG has failed to meet the burden of demonstrating that the Commission erred in authorizing the acquisition as the least-cost alternative,” the judge said. He also said that the Commission’s decision was “both lawful and reasonable.”
Kentucky Power said purchasing half of the output will help to replace nearly all of the generated power lost when Unit 2 at the Big Sandy Power Plant in Kentucky shuts down to comply with federal emissions requirements. The ownership transfer will cost around $536 million, compared to nearly $1 billion to install scrubbers at Big Sandy. Kentucky Power parent company American Electric Power (AEP, NYSE: AEP) announced in December 2012 that it would shut down the 800-MW unit and transfer half of the ownership of Mitchell from AEP Ohio. Kentucky Power plans to buy half of the output from the 770-MW Unit 1 and the 790-MW Unit 2, for a total transfer of 780-MW. Both Mitchell units are equipped with advanced environmental controls, including scrubbers. The remaining 50 percent ownership will be transferred to AEP subsidiary Appalachian Power.
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