One unit of Big Sandy power plant finishes conversion from coal to gas

A power plant that was once a major buyer of Eastern Kentucky coal has completed the transition to burning natural gas, owner Kentucky Power announced Monday.

The utility said Unit 1 at its Big Sandy plant in Louisa started producing electricity from gas on May 30. The unit went into service burning coal in 1963, but closed last November.

The converted Unit 1 can produce up to 268 megawatts of electricity, just a bit lower than the 278 MW it could produce when it burned coal.

The conversion mirrors what has happened at scores of other power plants around the country.

The relatively cheap price of gas and tougher rules on power plant emissions aimed at protecting air quality have driven decisions by utilities to switch fuels.

Coal has lost ground as a result.

The downturn has been particularly sharp in Eastern Kentucky, which in addition to competition from natural gas and other coal basins faces issues such as the depletion of easy-to-mine seams and high production costs.

The number of coal jobs in the region has dropped by more than half since 2011.

The Big Sandy plant helps illustrate why. The plant took delivery of 1.38 million tons of coal from Eastern Kentucky mines in 2014, according to Kentucky Coal Facts, a publication of the state Energy and Environment Cabinet. That was the second-highest amount of coal from Eastern Kentucky to a single plant that year, the report said.

Some years, the Big Sandy plant had bought more than 3 million tons of Eastern Kentucky coal.

Now it won’t buy any. Kentucky Power shut down the larger coal-burning unit at the plant.

The plan is to develop an industrial park on the site of that larger unit. The site is between a four-lane highway and the Big Sandy River and has rail access, according to a news release.

Demolition on the mothballed Unit 2 at Big Sandy is set to begin this week, said Allison Barker, spokeswoman for Kentucky Power.

Kentucky Power, a subsidiary of American Electric Power, at one time proposed closing the smaller unit at Big Sandy and spending nearly a billion dollars to install pollution-control equipment on Unit 2 so it could keep burning coal.

That would have meant an increase of 30 percent in the average residential bill.

The utility dropped the plan in the face of opposition from environmentalists, industrial interests and the state Attorney General’s Office, though the decision disappointed the coal industry and supporters.

The state Public Service Commission later approved proposals by Kentucky Power to mothball Big Sandy Unit 2, convert Unit 1 to gas and buy a 50 percent interest in a coal-fired power plant in West Virginia from another subsidiary of AEP.

The PSC said the changes were the most cost-effective way for Kentucky Power to meet its generating needs and preserve a generating plant in the state, keeping some employees and benefits to the local tax base.

The cost of converting the coal-fired generator to gas was $50 million, the PSC said in an order.

The Big Sandy plant has been a key employer in Lawrence County for decades, and there was concern over the loss of jobs and tax base if the plant closed altogether.

Barker said there were 71 employees last November when the plant stopped generating electricity so it could be converted to gas. There are 39 now.

“Our goal here in doing this is to make a reliable grid to power our neighbors’ homes,” plant employee Ricky Brown said in a company news release. “With the plant still here in Lawrence County, it provides jobs, it provides a tax base. It’s a big help for the community.”

Kentucky Power has about 169,000 customers in 20 eastern Kentucky counties.