Mitchell Plant Purchase Approved
The Kentucky Public Service Commission this week conditionally approved a proposal by Kentucky Power Co. to purchase half interest in the Mitchell power plant south of Moundsville to supply electricity in parts of eastern Kentucky.
That agreement came after Kentucky Power withdrew an earlier proposal to retrofit the 800-megawatt Big Sandy plant north of Louisa, Ky., with an emission-removing scrubber, opting instead to close the plant.
On Monday, the PSC authorized Kentucky Power to purchase a 50 percent interest in Ohio Power Co.’s 780-megawatt Mitchell plant. Both Kentucky Power and Ohio Power are subsidiaries of American Electric Power Co.
Under a 2007 federal court consent decree, Kentucky Power agreed to close the Big Sandy unit in mid-2015 unless it is upgraded to meet stricter air emission standards.
Kentucky Power plans to close the 800-MW unit and has said it intends to seek PSC approval to convert a 278-MW unit at Big Sandy to burn natural gas instead of coal.
Although the Mitchell acquisition is the least costly for Kentucky Power and its 173,000 ratepayers in 20 eastern Kentucky counties, the PSC noted that the shutdown of the larger Big Sandy unit will mean job losses and a sharp decline in local tax revenue.
The Mitchell plant is 42 years old. Ohio Power previously had considered selling the plant, which had scrubbers installed in 2007, to Appalachian Power, another AEP subsidiary.
According to AEP spokesperson Carmen Prati-Miller, the company is still awaiting approval by the West Virginia Public Service Commission to permit Appalachian Power, another AEP subsidiary, to purchase the other half interest in the plant.
She said both companies did not have enough generating capacity, and purchasing the Mitchell Plant will allow them to better serve their customer bases.