Utilities’ costs may rise to meet new guidelines A look at just one item, the Clean Air Transport Rule, shows how the new rules change previous predictions and plans. The Clean Air Transport Rule adds new limits for certain alreadyregulated emissions from power plants. In 2002 leaders at one Kentucky power generating co-op, Big Rivers Electric Corporation based in Henderson, decided to add new equipment at a coal-based power plant to meet the regulations timetable then in effect. The special new scrubber began operating in 2006. Mark Bailey, president and CEO of Big Rivers, says, “We took a pro-
active role back then to install this technology to reduce sulfur-dioxide emissions by 50,000 tons (about 60 percent system-wide). Now (under the Clean Air Transport Rule), the EPA wants us to reduce emissions by another 12 percent company-wide starting in 2012. Even if we could find some newer technology to do that, there is no way to get all the permits in time to comply, much less have enough time to design, engineer, order, and erect it.” Other utilities that rely on coal to produce electricity face similar problems as they examine the effect of new regulations. East Kentucky Power Cooperative (EKPC), based in Winchester, uses coal and natural gas at separate plants to generate about 2,900 megawatts of electricity. EKPC has already spent $666 million on a variety of emissions-control technologies and devices at its coal-based Spurlock Station. Tony Campbell, CEO of EKPC, discussed the effect of new EPA rules at a recent Kentucky Public Service Commission meeting. Campbell noted that under one EPA proposal, the electric utility may not get credit for much of its previous investments and the reductions in emissions it has already accomplished. Proposed new EPA computer modeling techniques also seem likely to produce data far different from the actual physical measurements that have been the rulebook
standard for many years. As utility companies revise their operating plans to play by a different and much thicker rulebook, they expect their expenses to rise as they make changes to meet the new guidelines. In turn, Kentucky electricity consumers will continue to see the rates on their monthly electric bills go higher. KL
UTILITIES ARE “STARVING FOR PREDICTABILITY” As electric utilities consider how best to change their operations to meet new rules, they must answer many questions: • When will energy-efficiency programs reduce demand? • When will an economic recovery increase demand? • What will happen to the price of coal or the price of natural gas? • Will large amounts of energy from sun and wind be widely available in Kentucky? What will each cost? In an uncertain world, Tony Campbell, CEO of East Kentucky Power Cooperative, says, “The whole industry is starving for predictability.” So today’s electric utilities are preparing best- and worst-case estimates to help guide decisions about the future.
Energy journalist NANCY GRANT is a member of the Cooperative Communicators Association and the American Society of Journalists and Authors.
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