Unit 2 of the facility is slated to close in 2015.
As an alternative, Kentucky Power officials said it would draw 780 megawatts of power for the area from the Mitchell generating station in Moundsville, West Virginia, which has already received the needed upgrades.
“The generation obtained from Mitchell would substantially replace the generation of the … Big Sandy [unit],” it said.
In May, Kentucky Power withdrew its plan to spend about $US1 billion to add a scrubber to the plant, as required under federal regulations.
The initial plan would have resulted in a 31% increase in power bills for the region’s customers while it said the revised plan would send bills up about 6%.
Under the new plan, Kentucky Power will obtain a 50% ownership of the Mitchell complex.
“At this time, and after much study and evaluation, we think this filing represents the best path forward for the company to meet both its environmental and customer obligations,” president and chief operating officer Greg Pauley said.
“When we withdrew our scrubber filing last summer, we stated that we felt new opportunities were emerging that would allow us to meet our obligations at a lower cost.
“The possibility of transferring these Mitchell units was among those opportunities and doing so will allow us to reduce the impact on customers’ bills.”
Kentucky Power has not yet decided the fate of Big Sandy’s 278-megawatt unit 1, the smaller and older of the plant’s two generating units.
A filing to cover the future generating capacity of unit 1 would be submitted to the Kentucky Public Service Commission sometime next year, officials said.
In the meantime, the company said it might replace generation from the unit and had put out a request for proposals on the idea.
Proposals received will be evaluated along with the possibility of converting unit 1 to natural gas combustion.
Unit 1 is scheduled to be retired as a coal-fired generator in 2015.
“In the coming months, we will determine a plan to address the remaining generating unit at Big Sandy plant,” Pauley said.
“We will perform our due diligence to determine an affordable plan that balances the needs of our customers, shareholders and the environment.”
