East Kentucky Power Cooperative

East Kentucky Power Cooperative, Inc. (EKPC) operates as a not for profit generation and transmission utility in Kentucky. EKPC operates as a parent cooperative that produces wholesale power for its 16 member co-ops that in turn service more than a half-million homes, farms, and businesses throughout Central and Eastern Kentucky. The company provides its services through coal plants, renewable energy plants, peaking units, hydro power, and transmission lines. East Kentucky Power Cooperative, Inc. was founded in 1941 and is based in Winchester, Kentucky.

Power portfolio
Out of its total 2,708 MW of electric generating capacity in 2005 (0.25% of the U.S. total), EKPC produces 67.9% from coal, 31.7% from natural gas, and 0.3% biomass. All of EKPC's power plants are in Kentucky.

Existing coal-fired power plants
EKPC had 9 coal-fired generating stations in 2005, with 1,839 MW of capacity. Here is a list of EKPC's coal power plants:

In 2006, EDPC's 3 coal-fired power plants emitted 9.0 million tons of CO2 and 62,000 tons of SO2.

Proposed Smith plant
The financial condition of the cooperative has been weaning. In 2006, EKPC failed to meet one of the financial ratios required by its loan covenants. It had lost money during 2004 and 2005 and narrowly had a profit in 2006. It has since applied for and received approval for two rate increases and has stated it plans more. In April 2010, EKPC withdrew its request with the state Public Service Commission (PSC) for approval of up to $900 million in private financing for a new coal plant, Smith Station. The withdrawal request was made shortly before a review of the EKPC's financial health.

On June 15, 2010, the Sierra Club and Kentuckians for the Commonwealth, represented by Earthjustice, challenged a decision by the federal Rural Utilities Service (RUS) to allow the EKPC to waive federal debt obligations and seek private financing for the Smith plant. According to the groups, RUS gave the approval without thoroughly analyzing EKPC’s perilous financial situation or environmental impacts and risks of the new coal plant--a decision that leaves taxpayers exposed to unnecessary financial risk.

Smith plant cancelled, cooperative to seek renewables and energy efficiency
On Nov. 18, 2010, EKPC entered into an agreement with Kentuckians For The Commonwealth, Kentucky Environmental Foundation, the Sierra Club, three individual co-op members, the Kentucky attorney general, and Gallatin Steel (EKPC’s biggest industrial customer) to halt plans for the Smith plant by abandoning the permits needed to proceed with construction. The cooperative also committed $125,000 toward a collaborative effort in which the public interest groups, EKPC and member co-ops will work together to evaluate and recommend new energy efficiency programs and renewable energy options.

According to Kentuckians for the Commonwealth, "a number of factors contributed to the decision to not to move forward with the proposed plants, including lower than expected demand for electricity, a moratorium imposed by the Bush Administration on low-cost federal loans for coal-burning power plants, and sharply rising costs associated with building and operating new coal plants. In June 2010, the Public Service Commission opened an investigation to determine if proceeding with the $819 million project was cost-effective and necessary. Studies commissioned by the public interest groups participating in this agreement concluded that a combination of clean energy technologies would be a cost-effective way to meet EKPC’s demand, while also reducing financial risk to customers, generating jobs throughout the region, and benefiting health and the environment."

East Kentucky Power Cooperative Settlement
On July 2, 2007 the U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency (EPA) announced that East Kentucky Power Cooperative, a coal-fired electric power plant, will spend about $650 million in pollution upgrades and another $750,000 penalty in a civil suit for violations of the New Source Review requirements of the Clean Air Act at its Spurlock Power Station, Cooper Power Station and Dale Power Station.

“Today’s settlement is another example of the Justice Department’s continued commitment to aggressively enforcing the Clean Air Act,” said Ronald J. Tenpas, acting assistant attorney general for the Justice Department’s Environment and Natural Resources Division. “The emissions reductions from this settlement are substantial, and we are pleased that East Kentucky finally agreed to resolve this litigation on acceptable terms and bring its facilities into compliance with important provisions of the Clean Air Act.”

The EPA and DOJ in 2004 filed a lawsuit against the utility for "illegally modifying and increasing air pollution at two of its coal-fired power plants."

The settlement states that the utility will install pollution control equipment to reduce emissions of sulfur dioxide (SO2) and nitrogen oxide (NOx) by more than 60,000 tons per year.

Related SourceWatch Articles

 * EPA Coal Plant Settlements
 * Kentucky and coal
 * United States and coal
 * Global warming

External Articles

 * An Analysis of the Economic Impact of Energy Efficiency and Renewable Energy in the East Kentucky Power Cooperative Region, Ochs Center for Metropolitan Studies, July 2009.