The Kentucky Public Service Commission on Sept. 3 approved the latest costs for Big Rivers Electric’s program to comply at its coal-fired power plants with the federal Mercury and Air Toxics Standards (MATS).
On May 7, the commission initiated a six-month review of Big Rivers Electric’s environmental surcharge as billed to its member distribution cooperatives for the six-month billing period August 2012-January 2013. The billing period reflects the environmental compliance costs incurred by Big Rivers from June 2012, through November 2012.
Big Rivers’ environmental compliance plan approved by the commission in a 2007 case consists of programs and associated costs dealing with the control of SO2, NOx and sulfur trioxide. The 2007 plan included only operating and maintenance (O&M) costs. In an October 2012 order, the commission approved certain additions to the 2007 plan relating to MATS compliance.
The 2012 additions involved installing activated carbon injection and dry sorbent injection systems and emission control monitors at Big Rivers’ Coleman, Wilson, and Green coal-fired stations; and installing emission control monitors at Henderson Municipal Power & Light‘s Station Two coal plant. The 2012 plan includes both the capital and O&M associated with these projects, as well as recovery of Big Rivers’ actual costs.
While Big Rivers did not request recovery of any capital costs through the environmental surcharge mechanism in this review period, it has indicated that it will begin recovering capital costs associated with the 2012 plan once construction on the approved projects begin, the commission pointed out in the Sept. 3 order.
Said Big Rivers about the status of these projects in a May 23 filing in this case: “Particulate testing that was ordered by the Commission in Case No. 2012-00063 has been completed at the Wilson and Green stations. Rig Rivers anticipates testing at the Coleman Stations to be complete by early June, 2013. Big Rivers will submit its report to the Commission shortly after that date, as soon as all test data is consolidated. Big Rivers is currently soliciting bids for A/E services for the MATS projects and anticipates awarding a contract by early June, 2013. Big Rivers’ current schedule projects the equipment specifications will be completed by the end of August, 2013, with construction scheduled to begin on or about September 30, 2013.”
The Kentucky PSC, in that October 2012 order, accepted a settlement calling for fewer-than-expected coal-fired emissions projects by Big Rivers Electric. Under the settlement, Big Rivers will not construct the most costly emission control projects proposed in its original plan, thus reducing the total cost by about 80%. The modified plan will cost $58.5m, which is $225m less than Big Rivers originally proposed.
Most of the changes in the environmental compliance plan were the result of an August 2012 federal court decision that struck down the Cross-State Air Pollution Rule (CSAPR) issued by the U.S. Environmental Protection Agency. The dropped projects were intended to comply specifically with those regulations.