EKPC cancels power plant

East Kentucky Power Cooperative's decision to pull the plug on a proposed 278-megawatt coal-fired power plant in Clark County is good news on several counts:

Consumers will not be stuck with paying for an unneeded $921 million-and rising project.

Kentucky's air and water, already tainted with more than their share of coal-inflicted pollution, will be spared the harm of an additional power plant. Some Kentuckians will have longer, healthier lives, as a result.

This decision, which settles a number of lawsuits against the utility, signals that EKPC is under smarter management and, we hope, on the way to stabilizing its shaky finances. That's important because 518,000 households and businesses depend on the non-profit utility for power. Also, federal taxpayers are on the hook for the co-op's low-cost loans.

Perhaps best of all, the utility has agreed to publicly collaborate with environmental groups that had sued to stop the power plant, and with its own co-op members, in searching out ways to increase the use of renewable energy and improve demand-side management.

By focusing on demand management, the collaborative will be tapping Kentucky's cheapest and most accessible power source: the energy we're now wasting.

And diversifying the energy portfolio could protect consumers from future price shocks.

Kentucky is the nation's third-largest coal producer; more than 90 percent of our electricity comes from coal. This has produced cheap power and the sixth-highest per capita residential electricity consumption in the U.S. In 2006, Kentucky's residential electrical use per customer was 24 percent above the national average. That's a huge source of energy just waiting to be mined.

In fact, about 60 percent of Kentucky's new energy requirements by 2025 could be satisfied by efficiency rather than new production, according to Kentucky's Department for Energy Development and Independence, which says this is not unrealistic as the U.S. has met 77 percent of its new energy demands with efficiency since 1970.

Coal-fired power plants will be much costlier to build and operate in the future.

One of many areas in which a management audit faulted EKPC was its "overfocus" on building, owning and operating power plants rather than developing a more diverse portfolio of different fuels, purchased power contracts and spot market buys.

Diversifying EKPC's energy sources is smart management. If a move toward efficiency, conservation and renewables creates jobs in the utility's 87-county area, that would just be icing on the cake.