Kentucky Regulators Approve Reinvestment in West Virginia Coal Plant Amid Rate Hikes
Kentucky regulators have approved a $138 million reinvestment in the Mitchell coal-fired power plant in West Virginia, reversing a prior decision to terminate ownership, amid rising infrastructure costs and declining customer numbers. This investment will result in a $2.33 increase in average bills for Kentucky Power's 165,000 customers, alongside a proposed 14.9% rate hike. The Public Service Commission expressed concerns about the company's planning but felt compelled to act to mitigate market volatility, while the Sierra Club has called for a transition to natural gas at the facility.
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Kentucky regulators have approved Kentucky Power's request to reinvest in the Mitchell coal-fired power plant in West Virginia, reversing a previous order to terminate ownership. The decision, described as the 'least bad' option, allows for a $138 million investment, leading to a $2.33 increase in average customer bills amidst a proposed 14.9% rate hike for the utility's 165,000 customers.
This comes as Kentucky Power faces declining customer numbers and rising infrastructure costs. The Public Service Commission criticized the company's planning and analysis but felt pressured to act to avoid exposing customers to market volatility.
The PSC's order mandates tracking of expenditures and annual reporting until 2031. Kentucky Power's long-term investment in the 1,560 MW plant, co-owned with Wheeling Power, was deemed necessary for market flexibility. The Sierra Club advocates for converting the plant to natural gas, while the Attorney General did not oppose the reinvestment agreement.
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