East Kentucky Power Cooperative (“EKPC”) is a generating and transmission cooperative utility with 16 member distribution co-ops, serving customers in 87 Kentucky counties, which plans to build and operate a new 287-megawatt coal-fired power plant called Smith #1 in Clark County, Kentucky. Many are questioning the economic impact of EKPC attempting to building more coal-fired utility plants in the economic environment.
Recently, three organizations – Cumberland Chapter of the Sierra Club, Kentucky Environmental Foundation and Kentuckians For The Commonwealth – released an in depth analysis that finds that EKPC should avoid the high capital costs of a new coal fired power plant, or its already weak financial position will worsen. The full report, executive summary, and power point presentation are available at:
http://kentucky.sierraclub.org/resources/environmental_research.asp
Now, Kentucky’s Public Service Commission (www.psc.ky.gov) has issued a request for proposal for an intensive audit of the management and operations of EKPC. The request for proposal is at: http://psc.ky.gov/agencies/psc/M_audit/ekp/EKPC%20RFP%20FINAL%2003-9-09.pdf.
The Public Service Commission just approved a rate increase for EKPC customers to recover costs associated with a new plant in Maysville, Kentucky. The increase which was effective on April 1, 2009 raises residential electric rates 6% and the average residential bill will increase about $6.75 per month.
We will be watching these developments very closely in the coming months. The PSC's experience with a similiar financial situation invloving Big Rivers Utilities occurred in the 1990s. Big Rivers eventually declared bankruptcy and wound up leasing their power plants to LG&E on a long term contract.
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