Kentucky regulators have approved Kentucky Power’s proposed $191 million cooling-tower replacement at the Mitchell coal plant, but tied that authorization to federal aid and approval from West Virginia’s regulator. The Public Service Commission’s October 16 order permits construction and partial demolition of the existing tower subject to conditions, rather than giving the utility an unconditional go-ahead.
The plant is near Moundsville, West Virginia, but the decision directly concerns Kentucky ratepayers. Kentucky Power serves about 162,000 customers across 20 Eastern Kentucky counties, according to its company release. Its ownership interest in Mitchell means investment decisions at the out-of-state plant affect the utility’s Kentucky service costs.
Federal money changes the economics
Kentucky Power announced June 4 that it had been selected for a $51 million Department of Energy grant supporting a mechanical-draft cooling tower. The company’s announcement described the funding as a way to modernize the plant and reduce customer cost impacts. That is the utility’s stated purpose, not a guarantee of a particular household bill or proof that all federal money has already been paid.
The commission’s conditions require stopping material work and seeking amended approval if federal funds are canceled, unavailable or materially changed before construction or the first disbursement. If such a change occurs after construction has begun and the first payment has been made, the utility must notify the commission within 14 days and explain its proposed response.
The order also conditions approval on West Virginia’s authorization and requires reporting on construction, demolition and significant cost increases. Separately, the commission denied the requested authority to defer project costs until they could enter the generation rider or base rates. These are provisions of the primary order, not estimates of what any customer will ultimately pay.
Earlier bill estimates are not the final charge
In June, WEKU reported utility testimony estimating a $3.64 monthly residential impact with the grant, compared with a larger estimate without it. That figure was presented during the proceeding; it should not be read as a new charge imposed on every bill by the October authorization.
The October 19 Lantern report said Kentucky Power could seek cost recovery through a future rate case or another mechanism. Regulators accepted evidence that the aging tower posed a safety risk, including possible failure in extreme weather. Spokesperson Sarah Lynch described the approval as supporting reliable service at reasonable cost. Sierra Club lawyers did not oppose the project after the federal award, but criticized the company’s analysis and urged that approval not foreclose consideration of other generation options.
The same report places the decision alongside an ongoing commission audit of Kentucky Power’s planning. For customers, the immediate distinction is between permission to undertake a project and the later accounting and rate decisions determining how its costs reach their bills.
