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Public Service Commission: LG&E Can Convert Cane Run Power Plant to Natural Gas

Louisville Gas and Electric has secured state approvalto build natural gas turbines at its Cane Run Power Station. The Kentucky Public Service Commission issued its ruling today.The rulingwill allow LG&E to build a 640 megawatt natural gas power plantat the current site of the coal-fired Cane Run Power Station, which is set to be retired by 2016. The company will also buy existing gas generation in Oldham County, if it gets approval for the project from the Federal Energy Regulatory Commission.Environmental groups intervened in the case, arguing that LG&E should examine sources other than gas to meet the area’s energy demand—like renewable sources and efficiency measures. In the order, the commissioners disagreed, but did require the company to commission a study to determine what energy savings can be achieved through efficiency programs.Earthjustice attorney Shannon Fisk was co-counsel for the environmental interveners. He says even though the application was granted, the efficiency study “is real progress that will hopefully save customers money and also be beneficial to the environment,” he said.Fisk adds the measure is a sign that energy efficient measures may play into future orders.“The commission clearly is recognizing that energy efficiency plays a very important role in figuring out future energy mixes and that it’s a cost-effective way to address future energy needs,” he said.LG&E estimates the $700 million gas phase of the project isn’t expected to raise the rates of LG&E customers, but the company has estimated it will raise Kentucky Utilities rates by about four percent. But previously-approved environmental upgrades to two of LG&E’s coal-fired plants are expected to raise LG&E rates 18 percent by 2016.