The application was filed Dec. 6 and is commensurate with a stipulated settlement agreement in the Mitchell Transfer case approved by the Commission Oct. 14.
As part of the settlement agreement, Kentucky Power agreed to file a CPCN to convert the 278 megawatt coal-fired unit to burn natural gas so long as the cost of the project did not exceed $60 million.
The CPCN seeks approximately $50 million in conversion costs and is a least-cost option for replacing generation lost from Unit 1 when it is retired in 2015. Unit 1 is being retired as a coal-fired facility because it will no longer comply with Federal environmental standards after 2015.
After the natural gas conversion, the Unit will have a generation capacity of approximately 268 MW
"Converting this unit is something we committed to do when we accepted the stipulated settlement agreement in October," said Greg Pauley, president and chief operating officer of Kentucky Power. "We have determined that the conversion of Unit 1 is a least cost option for meeting our customers’ electricity needs. In addition, it will allow us to retain a corporate presence in Lawrence County for years to come, contributing to the employment and tax bases of the region."
The company estimates the Big Sandy Plant will continue to employ 20-30 full-time persons once the conversion is completed and approximately 130 temporary jobs at the peak of the conversion construction project. The company anticipates having the converted unit online by mid-2016.
Kentucky Power is an operating unit of American Electric Power and provides electricity to approximately 172,000 customers in all or part of 20 Eastern Kentucky counties.
