EKPC ratepayers could face higher rates if co-op continues to invest in coal burning

A new report released today by Synapse Energy Economics, Inc. says the East Kentucky Power Cooperative (EKPC) is undertaking a financially risky resource plan by pushing forward with plans for a new coal-burning power plant despite pending carbon regulations, rising construction costs and a shaky economy.

David Schlissel, author of a preliminary assessment report of EKPC’s Integrated Resource Plan (IRP), said, "Regulation of power plant carbon dioxide emissions is not a question of if, but when, and how high the costs will be to utilities emitting high levels of carbon dioxide from coal fired power plants. With all of the economic uncertainty we now face, co-op members should not be locked for decades into paying for expensive carbon dioxide emissions.â€

"Construction of a new power plant is not a good decision when we have better opportunities for energy efficiency and renewable energy. I hope co-op leaders will hear members’ concerns, abandon the Smith plant, and choose to invest more in clean energy," said Janet Futrell, a Blue Grass Energy co-op member from Big Hill.

Schlissel compared the proposed carbon emissions reduction rates in the Waxman-Markey climate protection legislation moving through Congress to EKPC’s likely future carbon dioxide emissions that include two of EKPC’s newest coal-burning power plants, one of which came on-line in April 2009, and its proposed Smith 1 coal plant. The Synapse analysis shows that ratepayers may have to pay as much as $600 million per year by 2023 as a result of the expected carbon dioxide emissions from EKPC’s generating plants.

"Unfortunately, instead of leading EKPC in the direction of higher energy efficiency and renewable energy standards, my co-op is encouraging its members to resist the move in Congress towards policies that support long-term energy security and a healthy environment for all of us.â€ Futrell added.

"It’s not too late for EKPC to avoid these additional costs and prevent unnecessary financial burden on its ratepayers,â€ Schlissel said. "EKPC should follow the lead of the other utilities that have abandoned or significantly delayed approximately 90 proposed coal plant plans in recent years because of these cost risks, and make wise investments in renewable energy and energy efficiency.â€

"Continuing to be overdependent on coal to generate electricity in a carbon constrained future will saddle ratepayers with repeated rate increases like the 14 percent increase just announced by Grayson Rural Electric. EKPC is making decisions that will not responsibly serve co-op members,â€

said Doug Doerrfeld, a 30-year member of Grayson Rural Electric and past chair of KFTC.  Doerrfeld said he speaks regularly with people from all over Kentucky who are eager to embrace clean energy programs, which can help stabilize energy rates and make it easier for customers to pay their bills.