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With or Without Mercury and Carbon Dioxide Rules, Kentucky Electricity Landscape Will Change

Kentucky’s electricity generation landscape will look drastically different in the next five years, as coal-fired power plants retire or convert to natural gas.

And these changes are likely despite a Supreme Court ruling last week that sent a lawsuit over federal mercury rules back to a lower court. The court ruled the EPA should have considered the costs to utility companies at an earlier stage in the rulemaking process. But the five utility companies in Kentucky planning power plant retirements and new pollution control equipment to comply with the law all said for now, they’re proceeding with the upgrades.

Of the 56 coal-fired units operating in Kentucky in 2011:
•    Seven are already retired (the latest was the Cane Run plant last month);
•    Three are idled;
•    Nine more will be either retired or converted to natural gas by 2020.

So, that’s a third of the state’s coal fleet (based purely on the number of units, not the size of the units). These coal units consumed more than 39 million tons of coal in 2013, and the retirements over the next five years will cause a 15 percent drop in coal consumption.

And assuming the average useful lifespan of a coal-fired power plant is 65 years, the Energy and Environment Cabinet predicts another 12 of those coal units will retire by 2030.

That means in the next 15 years, more than half of Kentucky’s coal-fired power plants could be gone.

Number of Coal Fired Units | Create infographics

This is all before the EPA’s carbon dioxide rules—expected to be finalized later this summer—go into effect. All these retired coal-fired power plants likely won’t be replaced with more coal, because of stringent federal carbon dioxide limits on new power plants. So the commonwealth will likely see large reductions in air pollutants like carbon dioxide, sulfur dioxide and nitrogen oxide.

But how much mercury will be in the air in the short-term isn’t quite as clear, as last week’s Supreme Court decision casts some temporary uncertainty into the state’s energy industry. The five electric utilities planning plant retirements in Kentucky—Louisville Gas & Electric/Kentucky Utilities, Big Rivers Electric Coop, East Kentucky Power Cooperative, Tennessee Valley Authority and Kentucky Power—have all said they intend to proceed with planned retirements.

Marty Littrell of Big Rivers said the company is still looking at the very real possibility that the rule will go into effect eventually. “We need to be ready,” he said. That sentiment was echoed by the other companies, too.

But for the rest of the plants, it’s more complicated. In Louisville, LG&E is investing $940 million dollars into retrofitting its Mill Creek Power Plant to comply with the now on-hold mercury standard, as well as updates to other rules. LG&E Vice President John Voyles said the company was still moving forward with the upgrades, but hadn’t decided yet if it would operate the new equipment to remove the maximum amount of pollution from the plant’s emissions.

Baghouses will be installed on the plant and will collect some pollutants, but Voyles said there are additional operating costs if the company uses certain sorbent injection materials that increase efficiency. “It’s a question of whether or not you spend the money to meet a number that’s not there,” he said.

Graphic and additional reporting by WFPL intern Henrietta Reily.

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