Kentucky regulators conditionally grant approval to Kentucky Power to build 138-kV project

The Kentucky Public Service Commission, in a Dec. 6 order, conditionally granted to Kentucky Power a certificate of public convenience and necessity (CPCN) to build and operate the “Enterprise Park Project,” subject to reasonable assurance in writing from Enerblu, Inc., that sufficient financing has been secured to complete construction of its planned facility.

As noted in the order, Kentucky Power in August filed an application requesting a certificate of public convenience and necessity (CPCN) authorizing it to:

  • Build about five miles of new double-circuit, 138-kV transmission line in Floyd and Pike counties in Kentucky (Kewanee Transmission Line Extension). The proposed route will originate in Floyd County at a tap point of the existing Beaver Creek-Cedar Creek 138-kV circuit of the Sprigg-Beaver Creek 138-kV Transmission Line. The line will parallel the existing Big Sandy-Broadford 765-kV Transmission Line right of way (ROW) in a southeasterly direction for about 1.3 miles. The route of the line will then turn easterly, proceed in a relatively straight line for about 3.7 miles, and then terminate at the Kewanee substation
  • Build portions of a new 138-kV substation adjacent to the Kentucky Enterprise Industrial Park (Kewanee substation). The substation will consist of two 30-MVA 138/34.5-kV transformers, two 30-MVA 138/12-kV transformers, and one 16-foot by 36-foot base drop-in control module with a 12-foot expansion module, along with associated distribution structures and required ancillary equipment such as relays, current transformers, potential transformers, and telecommunications equipment. The substation will also contain two 138-kV transmission line positions in a ring bus layout utilizing six 138-kV circuit breakers to sectionalize the transformer and transmission line component, but those six circuit breakers will be built, financed, and owned by AEP Kentucky Transmission Company (Kentucky Transco) to reduce Kentucky Power’s debt burden and improve its credit metrics
  • Retire the existing Fords Branch 46-kV substation
  • Upgrade certain facilities and equipment at Kentucky Power’s existing Cedar Creek 138/69/46-kV substation in Pike County (Cedar Creek upgrades)

The commission said that it observes that the Enterprise Park Project has enjoyed broad community support due to the positive economic benefits expected from the businesses the project is expected to serve. Furthermore, the only person who requested intervention in the matter did not raise a concern regarding necessity of the project – the individual raised concerns about the location of the line with respect to property in which he asserted an interest, the commission said.

Thus, the commission said, given that the issues before it relate to whether there is a need for the project and whether it will result in wasteful duplication, the commission finds that a public hearing is not necessary for the public interest or for the protection of substantial rights, and therefore, the matter is before the commission on the evidentiary record.

The commission said that it finds that Kentucky Power’s request for a CPCN should be granted subject to certain conditions.

The commission also noted that the total projected cost to Kentucky Power for the project is $33.6m. The Kewanee substation and the Kewanee Transmission Line Extension make up the bulk of the proposed Enterprise Park Project. Specifically, the commission added, construction of the Kewanee substation and the Kewanee Transmission Line Extension respectively account for $12.5m and $19.9m of the total projected project cost to Kentucky Power. Upgrades to the Cedar Creek substation and the retirement of the Fords Branch substation account for $500,000 and $700,000 of the total costs, respectively.

According to the company, the project is required to adequately provide electric service to Enerblu and other industrial customers located, or to be located, in the Kentucky Enterprise Industrial Park, to correct thermal and voltage violations, as well as other reliability issues in the Pikeville area, and to address aging infrastructure issues at the Fords Branch substation.

Kentucky Power presented evidence that additional capacity will be necessary to serve the manufacturing facility that Enerblu expects to build in the Kentucky Enterprise Industrial Park, the commission added. The circuit that currently serves the Kentucky Enterprise Industrial Park has only 4 MW of capacity, whereas Enerblu indicated that its expected peak load demand will be 40 MW. Furthermore, the commission added, assuming Enerblu begins construction of its manufacturing campus this month or January 2019, Kentucky Power stated that Enerblu’s demand would exceed the 4 MW of available capacity on the circuit currently serving the industrial park when Enerblu begins equipment testing in or about December 2019. Thus, if Enerblu’s manufacturing campus is built in the Kentucky Enterprise Park Project, then Kentucky Power will need additional capacity to serve Enerblu, the commission said.

The evidence indicates that Kentucky Power worked with its engineering and siting experts and the community to achieve its goals of minimizing impacts to the community, minimizing special design requirements and costs, as well as permitting timely, safe, and reliable construction and operation of the line.

However, the commission added, Kentucky Power failed to present sufficient evidence to establish that the Enterprise Park Project is necessary and that the project would not result in wasteful duplication absent the need to serve the Enerblu manufacturing campus. The only tenant or announced tenant of the industrial park identified by Kentucky Power, other than Enerblu, is expected to have a peak load of 350 kW to 400 kW, which is well within the capacity of the circuit that currently serves the industrial park. Thus, the commission added, additional capacity is not currently necessary to serve the Kentucky Enterprise Industrial Park absent Enerblu’s expected manufacturing campus.

The commission said that since the Enterprise Park Project is based on the need to serve Enerblu’s manufacturing campus, it finds that the CPCN granted in its order should be conditioned upon Kentucky Power’s receipt of reasonable assurance in writing from Enerblu that sufficient financing has been secured to complete construction of the planned facility.

Among other things, the commission said that Kentucky Power is to immediately notify it upon knowledge of any material changes to the Enterprise Park Project, including increase in cost, any significant delays in the construction of the transmission line, or any changes in the route of the transmission line.

About Corina Rivera-Linares 3052 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.