New EPA rules prompt E.ON's Kentucky utilities to seek to retire 800 MW of coal-fired capacity, propose building 640-MW natural gas-fired plant in Louisville, buying natural gas-fired turbines in LaGrange totaling 495 MW

Bdebbie Garcia

Bdebbie Garcia

LOS ANGELES , September 19, 2011 (press release) – Louisville Gas and Electric Co. (LG&E) and Kentucky Utilities Co. (KU) propose expanding their natural gas-fired power capacity by 1,135 megawatts (MW) while closing down three coal-fired plants totaling nearly 800 MW of capacity, reported Reuters on Sept. 16.

The shift to natural gas from coal is a “lower-cost option,” said Paul Thompson, senior VP at LG&E and KU, in a press release on Thursday.

LG&E and KU operate under PPC Corp., an Allentown, Pennsylvania-based holding company owned by LG&E and KU Energy LLC and Subsidiaries, which was formerly E.ON U.S. LLC and Subsidiaries, according to the company’s website.

The companies have filed for state permits to build a 640-MW natural gas-fired, combined cycle power plant at the existing Cane Run coal-fired power plant in Louisville, Reuters reported.

In addition, they are seeking approval from Kentucky regulators to acquire three natural gas-fired turbines totally 495 MW of capacity from Bluegrass Generation Co. LLC in LaGrange, Kentucky.

In earlier filings, LG&E and KU proposed retiring their 563-MW Cane Run, 71-MW Tyrone and 163-MW Green River coal-fired power plants, which were started up between 1953 and 1969, reported Reuters.

New federal rules are forcing the closures while making it necessary to expand lower-emissions capacity, install additional emissions controls and do various upgrades at some of their other coal-fired power plants by 2016.

The capital investment will be US$800 million for the new natural-gas generators, including about $110 million to buy the Bluegrass facility, Reuters reported.

By the end of 2019, LG&E and KU estimate expenditures totaling as much as $4 billion to comply with new federal emission standards from the U.S. Environmental Protection Agency, with over $3 billion of that being spent by the end of 2016.

After the coal-fired plants are closed and the combined-cycle plant begins operating in 2016, LG&E and KU will generate 90% of their power using coal, compared with 97% now, the companies said.

LG&E and KU said that they will seek to recover their costs from customers in future rate filings.

Due to widespread use of low-cost, coal-fired power, the average residential ratepayer in Kentucky pays $0.065 per kilowatt hour compared with the U.S. average of $0.098/kWh, according to federal data, reported Reuters.

The primary source of this article is Reuters, London, England, on Sept. 16, 2011.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.

Share:

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.