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Dirty energy is expensive
By Billy Edwards
March 5, 2010

To follow up on the story The Winchester Sun did on the public hearing Feb. 4 concerning the East Kentucky Power Cooperative’s proposed J.K. Smith power plant at Trapp, this is what I said that night:

I have been a resident of Trapp for more than 30 years, a small business owner for more than 30 years, and I am also an EKPC Co-op customer.

Speaking from my concerns as a business owner and a customer of EKPC’s, I believe the cooperative’s priority to build new coal-fired power plants is poorly aligned with the direction of capital markets and national energy policy. This could result in risky business decisions, leaving rate payers to absorb the costs.

Coal is no longer a low-risk or least-cost fuel source for utilities or their rate payers. Nationwide, more than 100 proposed coal-fired power plants have been abandoned in the past two years due to skyrocketing construction costs, the anticipated costs of new regulations, rising fuel costs and reduced demand for electricity.

In 2008, these factors led the Rural Utility Service, a federal agency that has historically provided low-cost capital to rural electric cooperatives, to impose a moratorium on loans for coal plants.

EKPC’s own experience demonstrates the dramatic rise in construction costs for new coal plants. The proposed Smith No. 1 plant will cost approximately $820 million to build, and EKPC is seeking over $1 billion in private financing.

As an EKPC customer and a resident of Trapp, I want the cooperative to do the right thing. Currently, the justification for the Smith plant is weak, and EKPC has acknowledged a recent drop in demand for electricity. Since 2006 EKPC’s energy demand has steadily declined. Even if it were to start increasing, the cooperative could meet the demands of customers through cheaper, cleaner investments that would lead us into the future.

Overall, we are at a crossroads. The world has changed for electric utilities in recent years. These rapid and dramatic changes include the deepest recession in 80 years; the credit crisis; dramatic swings in the relative costs of coal, natural gas and renewables; a new political landscape; the swift deployment of renewable energy generation in our neighboring states; and a high probability of new federal policies aimed at curbing pollution and internalizing the costs of dirty energy.

East Kentucky Power Cooperative needs to stand up for the rate payers by abandoning plans to build Smith and investing in cleaner options for our future. Investments in energy efficiency, weatherization, renewables and natural gas can save rate payers money while putting people back to work and providing energy.

Staying the current course and failing to take this action will burden rate payers with unreasonable financial risks into the future. EKPC has an opportunity, and we’re asking them to lead, like the Horse Park.

The Kentucky Horse Park has taken the lead on their own. State officials recently announced a $5.7 million energy savings project that will pay for itself in yearly savings of $582,000 plus help improve the environment.

Funded by the federal American Recovery and Reinvestment Act, economic stimulus funds and low-interest loans, the projects include a new biomass gasification process to treat horse manure and turn it into gas that can be used to generate electricity. That will save the park $84,000 in electricity per year. They are also installing a 44 solar skylight tracking system at the park’s covered arena. This will eliminate the need for electrical lighting during the day.

This article is in the Clark Energy Cooperative’s Kentucky Living magazine, February 2010 issue.

As you can see, the Horse Park has taken the lead. This type of direction is the same way East Kentucky Power should be leading, not just the same old, same old.

Billy Edwards of Trapp is a Winchester businessman and former Clark County magistrate. These remarks, made at the public hearing on Feb. 4, have been edited only slightly to adhere to AP style.

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