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Kentucky Utilities Company

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Kentucky Utilities Company (KU) is a regulated electric utility and subsidiary of E.ON US. KU is based in Lexington, Kentucky, serving customers in 77 Kentucky counties and five counties in Virginia (under the name Old Dominion Power - ODP).

In June 2010, Pennsylvania Power and Light (PPL) announced plans to buy two Kentucky utilities for $7.6 billion from German power company E.ON AG: Louisville Gas & Electric and Kentucky Utilities, giving PPL an additional 1.2 million customers.[1]

Existing Coal Plants

Plant State Year(s) Built Capacity
E.W. Brown Generating Station KY 1957, 1963, 1971 739 MW
Ghent Generating Station KY 1974, 1977, 1981, 1984 2,226 MW
Green River Generating Station KY 1954, 1959 189 MW
Tyrone Generating Station KY 1953 75 MW


Pollution controls

Kentucky Utilities Company Clean Air Act Settlement

On February 3, 2009 the U.S. Department of Justice and the U.S. EPA announced that Kentucky Utilities Company (KU) agreed to pay a $1.4 million civil penalty and spend approximately $135 million on pollution controls. The settlement is a result of alleged New Source Review requirements of the Clean Air Act violations.

In March 2007, the EPA filed a complaint that KU modified its largest coal-fired generating unit at their E.W. Brown Generating Station without installing required pollution controls. The EPA noted that the "unit has been operating since 1971, and the modifications made in 1997 allowed the unit to increase the amount of coal it burned and increase the amount and rate of emissions for sulfur dioxide, nitrogen oxide and particulate matter. The government discovered the violations through an information request submitted to KU."

In the settlement KU agreed to install new pollution control equipment on the E.W. Brown Generating Station that will effectively reduce combined emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) by more than 31,000 tons per year. Particulate matter emissions will also be reduced through new pollution controls by approximately 1,000 tons per year. An additional $3 million will be spent on projects to mitigate passed alleged emissions violations.[2]

KU will be installing three scrubbers to reduce SO2 pollution, a contributor to acid rain, at three of its coal-fired units by 2020.[3]

Settlement for pollution control costs from customers

In a Nov. 10, 2011 settlement, Louisville Gas & Electric and Kentucky Utilities would be able to recover $2.25 billion from their nearly 1 million ratepayers to install pollution controls on their largest coal-fired power plants. Most of the environmental upgrades are slated for the 2,225-MW Ghent and 1,717-MW Mill Creek plants, as well as 547-MW Unit 1 at the Trimble County plant. Along with the two PPL subsidiaries, others who signed the agreement included Attorney General Jack Conway, the trade group Kentucky Industrial Utility Customers, Sierra Club, Natural Resources Defense Council and groups representing low-income customers.

LG&E and KU asked the PSC in May 2010 for permission to make $2.5 billion in improvements at the coal plants under an environmental surcharge law passed by the General Assembly in 1992, in response to Congressional approval of the 1990 Clean Air Act Amendments. As part of the November 2011 settlement, the utilities, in a concession to environmentalists, agreed to defer the planned construction of a fabric filter or "baghouse" on Units 1 and 2 at the 1,720-MW E.W. Brown plant to capture particulates, a project estimated to cost $225 million. LG&E and KU are barred under the settlement from resubmitting a request for the project before July 1, 2013, "unless finalized changes in the proposed utility MACT rules, future finalized ambient air quality standards, or other regulations finalized after the date of this agreement establish new environmental requirements for Brown Units 1 and 2," the settlement says.

The settlement "means we can go forward with our environmental cost recovery," said company spokeswoman Chris Whelan.[4]

Proposed coal unit closures

According to long-range planning documents filed in mid-April 2011 with the Public Service Commission, LG&E Energy and Kentucky Utilities Company are making initial plans to retire coal-burning units at three aging power plants by 2016, including the Cane Run Station in western Louisville, KU's Green River Generating Station in Central City in Western Kentucky, and KU's Tyrone Generating Station in Versailles, which has already been mothballed temporarily. A PPL spokeswoman for the two companies, Chris Whelan, said: “This is not a final decision," calling the planning document “a snapshot in time” to keep state regulators up to speed on the company's long-range thinking. In all, 979 megawatts of coal-burning capacity would be retired in 2016, while the two utilities would add 2,721 megawatts from natural gas — though it's not clear yet where the new gas turbines would be. The utilities currently produce about 8,000 megawatts of electricity.[5]

In September 2011, LG&E said in filings with the Kentucky Public Service Commission that it plans to replace its Cane Run coal plant with a 640 MW natural gas-fired plant by 2016, to be built at the same site. LGE and Kentucky Utilities reportedly also asked the commission to approve the purchase of Bluegrass Generation Co’s 495 MW natural gas-fired power plant, to replace their Green River Generating Station and Tyrone Generating Station.[6] On May 3, 2012, both the Can Run gas conversion and purchase of the Bluegrass gas plant were approved by the Kentucky Public Service Commission.[7]

On EPA list of 44 "high hazard" coal ash dumps

In response to demands from environmentalists as well as Senator Barbara Boxer (D-California), chair of the Senate Committee on the Environment and Public Works, the EPA made public a list of 44 "high hazard potential" coal waste dumps. The rating applies to sites at which a dam failure would most likely cause loss of human life, but does not include an assessment of the likelihood of such an event. Kentucky has 6 sites, all of which are owned by E.ON subsidiaries.[8]

KU's E.W. Brown Generating Station and Ghent Generating Station were among the EPA's official list of Coal Combustion Residue (CCR) Surface Impoundments with High Hazard Potential Ratings. To see the full list of sites, see Coal waste.[9]

History

"Kentucky Utilities officially began business on December 2, 1912 serving five properties (Versailles, Lawrenceburg, Somerset, Elizabethtown and Shelbyville). KU acquired Old Dominion Power Company (ODP) in 1926."[10]

"In 1998, KU's parent company, KU Energy, was acquired by LG&E Energy, which owned neighboring utility, Louisville Gas and Electric Company. The acquisition of KU Energy, along with the 25-year lease agreement with Big Rivers Electric, more than doubled the size of LG&E Energy."[10]

"UK-based Powergen bought LG&E Energy in 2000, and in 2001, Powergen agreed to be acquired by Germany's E.ON. The deal was completed in 2002. In 2003, E.ON transferred LG&E Energy from Powergen to another subsidiary, E.ON U.S. Holdings."[10]

Contact Details

Kentucky Utilities Company
Phone: (800) 331-7370
Website: http://www.eon-us.com/ku/default.asp

Articles and Resources

References

  1. "PPL spent $400,000 on lobbying in 1st quarter" Bloomberg BusinessWeek, June 24, 2010.
  2. "Coal-fired Power Plant to Spend More than $135 Million to Settle Clean Air Violations," U.S. EPA, February 3, 2009
  3. "Clear Skies in Kentucky," U.S. EPA, accessed November, 6 2009
  4. "Settlement would let LG&E/KU recover $2.25 billion to clean up coal plants" Washington Platts, Nov. 11, 2011.
  5. James Bruggers, "LG&E, KU may retire coal-fired units" The Courier-Joural, April 24, 2011.
  6. "Three coal-fired power plants to be replaced by natural gas" Power Engineering, Sep. 15, 2011.
  7. "PSC OKs natural gas plant to replace coal-fired facility on Cane Run Road," IndyStar, May 4, 2012.
  8. Shaila Dewan, "E.P.A. Lists ‘High Hazard’ Coal Ash Dumps," New York Times, June 30, 2009.
  9. Fact Sheet: Coal Combustion Residues (CCR) - Surface Impoundments with High Hazard Potential Ratings, Environmental Protection Agency, June 2009.
  10. 10.0 10.1 10.2 "About KU" KU Website, September 2009.

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