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Financial Report: Proposed Eastern KY Coal Power Plant Doesn’t Pencil Out

April 8, 2009

Clark County, KY – A new financial analysis shows that plans for a new coal-fired power plant in Clark County are not a smart money move. The TR Rose Associates study took a look at the financial health of the co-op proposing the plant, as well as what the $766 million price tag would mean for co-op customers. Report author Tom Sanzillo says the East Kentucky Power Cooperative is in a credit crunch, like many coal energy companies. He says building new coal plants at a time when Congress is looking at a carbon cap-and-trade system that will increase expenses is not a good idea. Discussion of instituting such a system should be an obvious sign that it's time to diversify energy production.

"The message coming from Washington is that you need to diversify your fuel sources. Any firm with a 97 percent dependency on coal is facing some tough financial decisions."

Dr. Suzanne Dansereau is a co-op customer in Clay County, which is one of the poorest counties in the country and an area extensively strip-mined. She says her patients often tell her how they're too financially strapped to pay more for electricity – and rates would go up with the new plant.

"The area has been really decimated by the coal industry; now they want to entrench us deeper, and they want us to pay for it."

The co-op says the plant is needed to meet growing customer demand, although Sanzillo says the co-op recently acknowledged there has been a recent drop in electricity demand. The report recommends the co-op focus on meeting customer needs through energy efficiency and renewable energy.

The research was funded by the Cumberland Chapter of the Sierra Club, Kentucky Environmental Foundation and Kentuckians for the Commonwealth.

The full report is at www.kftc.org

Deb Courson, Public News Service - KY