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Power Companies Seek Surcharges to Help with Coal-ash Cleanup Costs

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Wednesday, May 18, 2016   

FRANKFORT, Ky. - Sister power companies, KU and LG&E want their customers to help pay for compliance with new federal environmental rules.

The Kentucky Public Service Commission will hold public meetings on the requests next week in Louisville and Lexington. The utilities want to add a surcharge to electric rates as they spend nearly $1 billion to meet new regulations, including cleaning up what's left from burning coal at their power plants.

While coal ash needs to be cleaned up, said Lane Boldman, executive director of the Kentucky Conservation Committee, it shouldn't be an extra charge on customers.

"Those are costs that should have been inherent all along in the electricity rates," Boldman said. "If coal was showing the true cost of its expense, then it wouldn't be classified as the lowest-cost option."

However, Kentucky law allows utilities to recover environmental compliance costs separately from their general rates. If the PSC approves, it's estimated the average monthly electric bill for KU customers would go up $2.16 this year and peak at $3.54 a month in 2019. For LG&E customers, the average monthly hike would be 73 cents this year and reach $2.26 in 2020.

Accordng to the watchdog group Southeast Coal Ash Waste, more than 21 billion gallons of coal ash are stored at 19 power plants across Kentucky, and four are labeled "high hazard sites" by the Environmental Protection Agency. Boldman said the proposed environmental surcharge should be a signal to electric customers that it's time to demand cleaner options, which she said are becoming more affordable.

"It is the reality of what it takes to clean up and work with a dirty fuel, such as coal," she said. "I would hope that the public response should be to demand different kinds of energy that don't create these kinds of liabilities."

LG&E has said it will spend $311 million on environmental compliance projects, and KU estimates $678 million. The work includes closing and capping ash ponds, building new water-handling systems and improving air-emission controls.

The public meetings will be held at 5:30 p.m. Monday at Valley High School in Louisville and at 5:30 p.m. May 26 at Bluegrass Community and Technical College's Leestown Road campus in Lexington.

Information on rate cases is online at psc.ky.gov.


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