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Policy: Environment & Energy

House panel advances bill to save power plant

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News,Business,Energy and Environment,Power Plants

FRANKFORT, Ky. (AP) — Faced with trying to save 80 eastern Kentucky power plant jobs or risking a 30 percent spike in electric bills, a Kentucky House panel chose the jobs, but not without a heated debate.

Lawmakers Thursday voted 12-2, with five "pass" votes, to advance a bill that would require the Kentucky Public Service Commission to reconsider its decision to allow the Kentucky Power Company to shutter part of the Big Sandy Power Plant in Louisa.

Kentucky Power president Greg Pauley said the plant needed a $1 billion renovation to comply with new federal emission standards. The company would have had to raise power rates for its 175,000 eastern Kentucky customers by 30 percent to pay for it. Instead, Pauley decided to close part of the plant and purchase half of the Mitchell Power Plant for $536 million - a deal that required a lower 14 percent increase.

The Kentucky Public Service Commission approved the deal. The Appalachian Power Company was supposed to purchase the other half of the plant, but that was rejected by the Virginia Public Service Commission.

A bill sponsored by state Rep. Rocky Adkins, D-Sandy Hook, would require the Kentucky Public Service Commission to reconsider any multistate deal that was rejected by another state.

"A devastating impact on both jobs and a devastating impact on the regional economy. That's the reason I stepped forward," Adkins said. "I have fought the fight to do everything I know to do to try to keep that power plant open."

The bill now goes to the Democratic-controlled House of Representatives. It would need the approval there and the Republican-controlled Senate before it could become law.

In a tense public hearing lasting more than an hour, Pauley told lawmakers that Adkins - a powerful member of the House Democratic leadership - was giving them wrong information. He said the bill would create "deep uncertainty" by second guessing decisions of the Public Service Commission. And he said saving about 80 jobs would not be enough to counter a 30 percent increase in power bills.

"Make sure your electorate knows that you want them to have a higher electric rate," Pauley told lawmakers. "And I don't want them to have a higher electric rate. I'm engaged in eastern Kentucky. I want them to come out of the recession."

Adkins and other lawmakers noted the thousands of eastern Kentucky coal mining jobs lost in recent years as reasons to keep all of the plant open. Rep. John Short, D-Mallie, said the power rates would not matter if people did not have jobs to pay them.

"What about the return on investment for our coal miners? We're invested in the mountain. We live there. Y'all might have money invested there, but we have our lives invested," he said.

Rep. Brian Linder, R-Dry Ridge, said he voted against the bill because he believed it would "open Pandora's box."

"It is a documented, automatic at minimum 30 percent increase on the good people of eastern Kentucky and I can't in good conscious vote for that if they go back and change this ruling," he said.

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