The Kentucky Power Company is seeking an increase in its environmental surcharge to fund a $11.9 million clean coal project that’s required for a plant in Indiana.
In a case in which the company is seeking approval of its environmental compliance plan from the Kentucky Public Service Commission, Kentucky Power is also asking the PSC to approve a revised environmental surcharge to recover costs associated with a project added to the company’s environmental compliance plan.
The plan was amended to add a project that would include the installation of a Selective Catalytic Reduction System, or SCRS, at its Rockport plant, located near Rockport, Indiana. The project that is required under the federal Clean Air Act and consent decree the company was a party to in federal court in Ohio in 2007.
Kentucky Power’s share of the “first year cost of the installation,” plant upgrades and other costs is expected to total $11.88 million, the company reported.
At that amount, the company estimates the environmental surcharge factor will increase from about 5.9 percent to about 8 percent for residential customers and from about 9.4 percent to 12.5 percent for other customers.
That increase is expected to increase residential customers bills by 2.20 percent and 2.07 for other customers.
“For a residential customer using 1,267 kWh per month, the monthly increase in the customer’s bill is expected to be $3.32,” Kentucky Power reported.
Average customer bills will increase from about $151 to about $154, the company reported.
According to testimony provided in the case, the Rockport plant unit mentioned in the case cannot operate past June 2020 without a new SCRS system being installed. It’s described as an “advanced clean coal technology” designed to reduce nitrogen oxide emissions associated with the combustion of coal.
In a deposition filed in the case, Gary O. Spitznogle, vice president of environmental services for AEP, reported that the Rockport Unit 2 already uses nitrogen oxide combustion controls, but adding the SCRS technology “is the most reasonable way” to lower “additional significant” nitrogen oxide emissions from the unit.
“As part of the Clean Air Act and the related 2007 Consent Decree, Kentucky Power affiliate and Rockport operator Indiana Michigan Power Company (‘I&M’) must retrofit Unit 2 of the Rockport Plant with SCR technology by June 1, 2020 to continue operation of this unit,” Spitznogle said, explaining that adding the technology will also ensure compliance with federal laws.
The full filing and depositions are available online at, psc.ky.gov under case number 2019-00389.