LG&E, Kentucky Utilities To Replace Three Coal Plants With Natural Gas

by Erica Peterson on September 15, 2011

One of Louisville’s two coal-fired power plants will be taken offline in the next five years. By 2016, Cane Run Power Station will be replaced by natural gas—a fuel that’s cleaner than conventional coal.

Louisville Gas and Electric and Kentucky Utilities will retire the Cane Run plant in southwest Louisville, as well as two other coal-fired plants in Kentucky. The company plans to build one natural gas-fired plant on the Cane Run site and purchase an existing gas plant in Oldham County.

“This was based on the new EPA regulations,” LG&E spokeswoman Chris Whelan said. “We looked at what we were going to have to do to be in compliance with those new regulations.”

The company decided it would be cheaper to replace the coal plants with natural gas than to install advanced pollution controls on the aging units. Whelan says if the deal is approved by the Public Service Commission, it won’t affect the rate increase that’s pending or future LG&E rates.

“Based on the allocation of energy, the new plant is not expected to increase LG&E’s rates,” she said. “This particular filing is just for the application to get approval to actually build something, but even then we’ve estimated that LG&E will not see an increase.”

But KU customers could see a four percent increase in their rates.

The switch to natural gas could be a harbinger of things to come for the state’s coal industry. Bill Bissett of the Kentucky Coal Association says the new pollution rules should be coming from Congress, and not the Environmental Protection Agency.

“This is an economic issue that goes way beyond just the ratepayers within the footprint of this power plant but could affect the commonwealth’s economy,” he said. “As we see this movement from D.C. to move us away from coal, the question I think both the PSC as well as Congressional leaders outside of Louisville need to ask themselves, what is this going to do to the economy of Kentucky overall, not just our kilowatt per hour?”

LG&E used primarily Kentucky coal in the Cane Run plant, according to Whelan. The natural gas to run the new units will come from Texas Gas Transmission, whose pipelines start in the Gulf. Some employees might lose their jobs during the transition, too.

But for those who live in the shadow of the Cane Run plant, the news was well-received.

“I think I’m optimistic,” said Kathy Little. Little lives next door to the Cane Run plant and has raised concerns about the plant’s storage of coal ash. At Cane Run, the ash is stored in a pond and open landfill, and Little has documented ash blowing off the property and into their neighborhood.

“The news that there won’t be any more particulates after awhile, obviously is good news,” she said.

The Louisville Air Pollution Control District has issued one notice of violation for the Cane Run Plant, and is investigating other issues. The coal ash landfill and pond at Cane Run will stay on the site—once they’re no longer in use, they’ll be capped. Little says she looks forward to cleaner air when she’s living next to a natural gas-fired power plant, but there are still lingering concerns of water contamination from the coal waste.

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