East Kentucky Power Co-op lights into EPA over coal-killing CO2 plan

East Kentucky Power Cooperative, which relies heavily on coal-fired capacity, told the U.S. Environmental Protection Agency that the CO2-reducing Clean Power Plan (CPP) proposed in June will devastate the coal-fired power industry.

“The proposed CPP will result in significant reduction of or elimination of nearly all coal generation,” said the generation and transmission cooperative’s Nov. 26 comments to EPA on the plan. “The CPP’s Building Blocks 1, 2, 3 and 4 for BSER are characterized by EPA as ‘shifting’ power generation away from coal-fired units. However, through the Building Blocks EPA is actually forcing the retirement of numerous EGUs because of an extreme position EPA takes in each of these Building Blocks. The majority of G&Ts rely primarily (and in some instances almost exclusively) on coal generation. Curtailing coal generation, as proposed in the CPP, will threaten reliable service because of G&Ts’ significant reliance on coal generation to provide electricity to their members.”

EKPC later added: “The CPP proposes shifting a substantial percentage of electricity generation to existing NGCC units. However, there is not enough existing NGCC in this country, and none in Kentucky, to make up for the forced reductions in coal generation. Gas supply and infrastructure in this country are not available or reliable enough to serve all the gas generation that will beneeded. This leaves a significant gap between the energy that can be generated and remain in compliance with the CO2 goals and the energy that must be generated to continue to supply reliable electricity to the population.

“These NGCC units were not designed to operate at capacity factors close to EPA’s 70 percent re-dispatch goal and the system cannot support that level of operation even if the units could run that much. The only way in which the re-dispatch can work is for there to be significant improvements in natural gas and transmission infrastructure across the country generally, and particularly in Kentucky, and for new NGCC and existing peaking gas units to count for compliance. There are numerous regulatory, engineering and cost hurdles to establishing a sufficient infrastructure for increased reliance on the installation of new NGCC sources and EPA neglected to account for these barriers in its proposal.”

EKPC said about particular impacts of the plan on its system: “EKPC relies on rate revenue from the high capacity factor operation of its 1,400 megawatt Spurlock Generating Station to service its substantial RUS debt, maintain infrastructure, pay for increasing maintenance expenses, expand its natural gas generation while struggling to maintain low rates. EKPC has invested well over a billion dollars to install state of the art emissions controls to comply with numerous other regulations issued by EPA under the CAA: its New Source Review (NSR) Consent Decree, Title IV, NAAQS, CAIR, CSAPR, NSR, MATS, the Clean Water Act, and various solid waste regulations. EKPC’s coal-fired units are among the lowest emitting units in the country. Now EPA is proposing to restrict the ability of these well-controlled units from operating and will leave these investments as stranded assets and result in dramatic, unprecedented and dangerous increases in electricity rates.

“Spurlock’s potential stranded cost is nearly $1.4 Billion. This amount will potentially be even higher as EKPC continues to invest in projects to meet additional non-CPP environmental regulations andother operating enhancements. As discussed, across the country MATS is forcing the retirement of approximately 47-75 GWs of coal units. The CPP is estimated to force the retirement of an additional approximately 40-48 GWs of coal capacity. These extensive retirements are expected to exacerbate resource adequacy concerns unless additional replacement capacity can be built in a timely fashion.”

Anthony “Tony” Campbell, president and CEO of EKPC, said in a Dec. 1 statement about the Clean Power Plan: “For Kentucky, coal has been the fuel that is best suited to assure reliable, affordable electric service. The results speak for themselves. Kentucky consistently has had reliable electric service and some of the lowest electric rates in the nation. Kentucky has built upon this strength, creating hundreds of thousands of manufacturing jobs, which depend upon reliable, affordable energy. Therefore, Kentucky has much at stake as EPA prepares to regulate carbon dioxide emissions. EPA’s plan goes too far, too fast. Rather than simply regulating the emissions from power plants, as prescribed by the Clean Air Act, EPA is attempting to regulate the electric power sector. EPA is attempting to mandate generation technologies and control consumer behaviors.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.