Environment Uncategorized

LG&E, KU Plan to Switch Units From Coal to Gas Part of a Nationwide Trend

Last week, Louisville Gas & Electric and Kentucky Utilities announced a plan to retire three coal-fired power plants over the next four years. The plants will be replaced by facilities that burn natural gas—which is cleaner than coal. The utilities are part of a growing trend across the nation to retire older coal plants.

To most people, a gas turbine doesn’t sound any different than a jet engine, or than the sounds you’d expect to hear in a coal-fired power plant. But in terms of what this sound means for the region’s energy mix, it’s a big deal.

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There are gas plants in Kentucky, but more than 90 percent of the electricity generated in the commonwealth comes from coal. Now, LG&E and KU plan to spend about $700 million building a new natural gas power plant at the Cane Run site and purchasing existing turbines in Oldham County.

“The Midwest and the Southeast, particularly, have been heavily dependent on coal-fired power plants and have been slow to adopt other technologies,” said Stephen Smith, the executive director of the Southern Alliance for Clean Energy.

Kentucky, West Virginia, Missouri, Ohio, Indiana, Georgia and Tennessee are all states that get most of their energy from coal. But that’s slowly changing.

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LG&E to Replace Coal-Fired Cane Run Plant With Natural Gas

Louisville Gas & Electric announced today that its coal-fired power plant in southwest Louisville will be taken offline by 2016. The company will build a new natural gas-fired plant on the same property.

This is an option LG&E has been weighing publicly since April. In an interview earlier this summer, Vice President John Voyles said the final decision would come down to whether it was cheaper to retrofit Cane Run with newer pollution controls to meet upcoming federal standards or replace the plant altogether.

“So we’ve evaluated what it takes to meet the new rules and we have a cost,” he said. “We’ve also looked at what it would cost to replace that with a different source, maybe close that unit. And our early analysis says the cost of putting controls on at this facility are higher than the cost of another option.”

Lately Cane Run has been under scrutiny as neighbors complain about air pollution stemming from the coal ash stored on the site.

The move still has to be approved by the Public Service Commission, which will need to ensure that the company can generate enough power to meet consumer demand with the new plant.

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Natural Gas Prices To Increase

Natural gas prices will be going up again this winter in Kentucky. An increase in gas-fired power plants and an unstable market are responsible for the increase.

Most of the natural gas that will be used this winter was purchased and stored in the summer, during a price spike. That was caused by a rush on Wall Street to purchase commodities, which seemed safe in an uncertain market.

Kentucky Public Service Commission spokesperson Andrew Melnykovych says the same uncertain market may protect prices from another spike next year.

“Typically what happens to energy prices when you’ve got an economic downturn is the energy prices tend to come down because the demand either declines or just doesn’t grow as fast,” he says.

Melnykovych says natural gas will cost about 17 percent more this coming winter, which is close to the national average increase.

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Report: Energy Costs Affecting Housing Affordability

A new report from the Louisville Metropolitan Housing Coalition says heating and other energy costs are playing more of a role in home affordability in the Louisville area.

Coalition Executive Director Cathy Hinko says the average natural gas bill has more than tripled over the past decade and continues to rise.

“All of us are going to feel the pinch this winter, and we wanted to make sure that had a high profile as well. people who did not consider themselves vulnerable as the prices increase will become vulnerable,” Hinko said.

She adds that many homes in Louisville were built before insulation was a building code requirement, and a lot of them are concentrated in low-income areas.

Hinko says the coalition is working with government and utility company officials to help low-income families make the dwellings more energy-efficient.

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PSC: Brace For Higher Winter Heating Bills

The Kentucky Public Service Commission is advising homeowners to prepare for what could be a sharp increase in their heating bills this winter.

PSC spokesperson Andrew Melnykovich says natural gas prices have hit levels not seen since 2005, when supplies were disrupted by hurricanes Katrina and Rita.

But this time it’s not a supply problem that’s driving prices up.  He says analysts point ot the fact that more investors are trying their luck with commodities such as natural gas.

“The underlying market fundamentals aren’t there to explain it. there’s plenty of gas, there’s plenty of gas in storage, there’s no unusual demand spike, no supply disruption that would normally underly this kind of an increase,” Melnykovich said.

This summer the price of natural gas has been about 65 percent higher than a year ago, although prices have begun to fall in recent weeks.   It appears that the cost of home heating will still be higher than in the last two years.