Coal may not be EKPC's answer for inexpensive, reliable energy

By Billy Edwards

December 11, 2009

Twenty-five years ago, the East Kentucky Power Cooperative wanted to build a coal-burning power plant in Clark County. The project eventually was canceled because there wasn’t enough demand to justify the multi-million dollar expense — but not before ratepayers were left with higher bills to cover costs.

A quarter century later, that story is just as relevant, and poised to repeat itself.

Despite a 12 percent decrease in energy demands, EKPC is pushing forward with plans to build a coal-burning plant here in Clark County, a project that ratepayers would have to foot the bill for.

For the past 32 years, I’ve lived in Trapp, near where the Smith plant would be built. I own a business in Clark County and have friends and neighbors who work for EKPC. I know how important coal is to our commonwealth. But as painful as the truth might be, we’ve got to make an honest assessment of this project and look reality — and history — squarely in the face.

EKPC’s own financial documents show that it is already saddled with crushing debt and poor credit. With the cooperative teetering on the brink of bankruptcy, I have serious doubts about the financial wisdom of building the Smith plant, which would force EKPC — and its ratepayers — to take on more than $800 million in additional debt.

As a business owner, I want as much as anyone to see new jobs created and for my community to prosper. However, as a ratepayer, I am equally concerned that EKPC is setting up customers to bear the brunt of another unwise decision. In fact, there’s a very real prospect that the huge burden of financing the Smith plant could push EKPC over the edge, leaving this part of Kentucky with even greater economic woes.

EKPC’s success is important to the well-being of our communities. There are plenty of opportunities for the electric cooperative to put itself back on sound financial footing and to continue meeting demand.

Other utilities around the country are investing in clean energy projects, especially efficiency programs, that are reliable, that help save ratepayers money, and that create long-term jobs. EKPC should do the same.

As hard as it might be to accept, the Smith plant simply is not a good idea. The price tag has ballooned by more than a quarter-billion dollars in the last three years. And, as was the case 25 years ago, the energy is not even needed.

Demand for electricity appears to be decreasing, and EKPC already has its new Spurlock coal unit and a gas facility to generate more than enough electricity.

And even if usage does increase, the most cost-effective way to meet demand is through efficiency programs, which the utility has barely scratched the surface of, not huge capital projects that take decades to pay off.

Beyond that, as regulations protecting us from things like smokestack pollution, the hazardous chemicals in coal-ash waste and carbon emissions become more stringent, clean energy will be even more affordable, making the Smith plant an even costlier dinosaur.

Unless we’re willing to consider all of our options, we’re bound to repeat the mistakes of the past. And I for one, like most of my neighbors, simply can’t afford to have my electricity rates go up.

The Smith plant’s huge financial risks beg for someone to step in to protect ratepayers. The Kentucky Public Service Commission should very seriously consider a request currently before it to revoke the outdated certificate for the plant, which was issued more than three years ago under very different circumstances.

The PSC’s mission is to ensure that utilities provide safe and reliable electricity and to oversee the financial stability and “operational competence” of utilities so that ratepayers are charged fair and just rates.

It’s a truth we must face: the Smith plant fails on all those fronts, and the PSC would be more than justified in stepping in to institute fiscally wise and responsible decision-making. If EKPC won’t cancel the project, the PSC should put the brakes on it now before another dime is spent.

Billy Edwards of Trapp has lived in Clark County for three decades. He is a member-owner of Clark Energy, one of the 16 electric cooperatives comprising the East Kentucky Power Cooperative, and a former county magistrate.