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Kentucky Power Co-op Members Challenge Coal Decision

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March 15, 2010

FRANKFORT, Ky. - Ratepayers from eleven rural electric co-ops in Kentucky are questioning a U.S. Department of Agriculture decision, allowing the Eastern Kentucky Power Cooperative (EKPC) to seek $900 million in funding from private sources for its proposed Smith coal-burning power plant. Fifty co-op members have signed on to a letter asking the Agriculture Department's inspector general to investigate the loan approval.

Elizabeth Crowe, executive director of the Kentucky Environmental Foundation, says the concerns raised are not just about the environment: there's also an economic element.

"Members of electric co-ops that distribute electricity produced by East Kentucky Power are very concerned that the co-op is not in good enough financial shape to be able to take on such a huge amount of debt."

EKPC already owes the Agriculture Department's Rural Utilities Service (RUS) around $700 million from past loans. The RUS stopped making any loans for new coal-burning plants in 2008.

Crowe says the decision to let the project move ahead has some wondering how deeply the agency explored, not only EKPC's finances, but also its reason for not considering other energy sources.

"Proposing to them that they look for safer, cleaner alternatives to coal, that's when it's really come clear that the Rural Utility Service process is just not as robust as we think it should be."

Crowe says those alternative sources are already available, such as wind and solar power.

"What we have lacked is the political will and the willingness of a lot of utilities to really, kind of, put their stake in that ground."

While many second-guess the rationale behind investing big money on coal technology, EKPC's board of directors says its goal is to provide customers with power that's affordable and efficient, and it says coal delivers on both accounts.

Tom Joseph, Public News Service - KY