Kentucky state utility regulators have dealt a blow to plans to keep a Marshall County coal-fired generating plant operating until its planned retirement date of 2040.
The Kentucky Public Service Commission issued an order Thursday rejecting Kentucky Power’s request for a certificate to implement and recover costs for federally required environmental upgrades at the Mitchell plant near Moundsville that would keep the plant operational for another 19 years.
Instead, the commission approved another plan that Kentucky Power, an American Electric Power subsidiary, had modeled but deemed less desirable: completing only enough environmental upgrades to keep the plant federally compliant and operating through 2028.
The commission found that Kentucky Power failed to prove that a project to keep the plant in compliance with federal effluent limitation guidelines regulating wastewater discharges at coal-fired generating facilities was cost-effective.
Instead, the regulators concurred with Kentucky Attorney General Daniel Cameron, a Republican, the Kentucky Industrial Utility Customers advocacy group, and the Sierra Club that Kentucky Power’s modeling assumptions significantly overestimated the projected cost of other generation resources, resulting in what they argued was a misleading suggestion that the wastewater project would be more cost-effective than the alternatives.
Kentucky Power had contended that making the necessary environmental upgrades to keep the 50-year-old Mitchell facility operational through 2040 was the most economical option, noting that the company will have a substantial capacity shortfall if Mitchell is retired in 2028.