Yesterday the Kentucky Public Service Commission (PSC) launched an investigation into East Kentucky Power Cooperative's (EKPCs) request for a new coal-burning power plant in Clark County.  The PSC decided to open their investigation after responding to a complaint that KFTC and our allies filed last October. 

If built, the Smith plant would cost nearly $1 billion dollars -- which would be passed onto rate-payers who are also owners of the co-ops.  We are pleased that the PSC is taking a good, hard look at the need for the Smith plant.  Given the large expense and financial burden it would be for rate-payers, and the potential for more affordable, cleaner energy options, a closer examination of the Smith plant is a logical step for the PSC.

The PSC investigation centers around a “Certificate of Public Convenience and Necessity” that EKPC must receive from the Kentucky PSC to build its proposed plant. EKPC applied for and received the certificate for the proposed plant more than three years ago.  However, costs, electricity demand, technology and EKPC’s financial stability have since changed significantly, undercutting EKPC’s arguments that it still needs the plant.

The PSC's investigation has the power to stop the proposed Smith plant and help move EKPC in the direction of more affordable and cleaner energy options.  As part of its investigation, the PSC will be holding a public hearing.  Stay tuned as we learn more and the campaign moves forward.  And thanks to all KFTC members who have taken action in this campaign.  With great steps forward like this one -- where the PSC listened and responded to us --  it is clear that all our efforts are paying off!

Read some of the great news article by clicking on the links below:

Lexington Herald-Leader story
Courier-Journal article

Associated Press article that was picked up in Business Week

The Public Service Commission's press release

UPDATE: At Tuesday's public hearing (see more below) the Army Corps of Engineers announced they have extended the deadline and are accepting written comments on the Smith plant's dredge & fill permit until June 18. Comments may be be submitted to the Corps via email: lrl.regulatorypubliccomment@usace.army.mil 

Click here for information to help you compose your comment.

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More good news on the Stop Smith campaign. Tuesday night, about 125 people attended a public hearing on a proposed permit that would allow East Kentucky Power Cooperative to impact Kentucky waterways and wetlands with coal ash. Of the 32 people who took the microphone, 31 opposed EKPC's plan to build a new coal-burning power plant in Clark County.

This "dredge and fill" permit - also called a 404 permit - would allow EKPC to impact more than 14 miles of streams including 210 stream channels and nearly 5 acres of wetlands, burying about half of these waterways that feed into the Kentucky River under toxic coal ash.

Many speakers focused on the dangers of mercury in the coal ash and other potential long-term effects. The Army Corps of Engineers will consider the comments in deciding whether to grant the permit.

John Patterson, who owns land adjoining the site, said he worries about his family and how the plant will affect future generations. "This is something that, quite frankly, is scaring me to death."

Patterson said Kentucky has an opportunity to be a leader in innovative energy technology. "The eyes of the nation really are upon us," he said.

Miranda Brown, also a Clark County resident, worries about her drinking water. "94 percent of my drinking water comes from the Kentucky River," she said. Brown gets her water from Winchester Municipal Utilities, which has intakes near the site where coal ash will be dumped.

"The people of Clark County know better than to defecate in our own water. Can we trust the Army Corps of Engineers to do the same?" Brown asked.

Only one speaker, William Quisenberry of Winchester, expressed support for the plant, saying it would bring good jobs and that he trusted EKPC and the state to keep the plant safe. But many other speakers disagreed, saying energy efficiency and renewable energy would produce many more jobs. They also cited the recent Gulf oil spill and the Kingston coal ash spill as examples of industry and government not doing their jobs to ensure safety.

Allies KFTC, Kentucky Environmental Foundation and the Sierra Club offered free mercury testing at the hearing to call attention to the already high mercury levels in Kentucky waterways.

If you missed the hearing, you can replay KFTC's live blog of the event, and watch video clips from the hearing at this link: http://www.kftc.org/blog/archive/2010/06/08/live-blogging-smith-404-permit-hearing

For more information about the hearing, follow these links:

Winchester Sun article: http://www.winchestersun.com/stories/2010/06/09/loc.105845.sto

Lexington Herald Leader article: http://www.kentucky.com/2010/06/08/1298302/dozens-oppose-proposed-power-plant.html

WKYT video clip: http://www.wkyt.com/home/headlines/95923954.html

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More photos from the hearing:

  

  

  

  

     

Live commentary

KFTC members and allies will be posting notes, commentary, and photos from the hearing below. If you wish to participate, you can either leave comments at the bottom of the page or join the conversation on Twitter using the #stopsmith hashtag

Live video from the hearing

We will be broadcasting live video of speakers and interviews with attendees intermittently throughout the hearing.

The proposed coal-burning Smith plant is refusing to die.

Your voice is needed to end it once and for all!

The coal-burning Smith plant proposed by the East Kentucky Power Cooperative is the living dead. 

It's taken hit after hit in recent weeks from the work of KFTC and our allies – we've had some good success. For example, EKPC has temporarily pulled its request for financing approval, a major audit said the plant is the "biggest risk" EKPC will face in many years, and the U.S. EPA has objections to the state-issued air permit .... yet, EKPC is marching on, seeking a permit to put millions of tons of coal ash from the plant into Kentucky's streams. It's time to tell EKPC and state officials to pull the plug and stop wasting taxpayer money. It's time for good, local, clean energy jobs instead.

You can help stop this coal zombie:

Attend the public hearing held by the Army Corps of Engineers next week, Tuesday, June 8, at 7 p.m. in Winchester. Stand with folks from all over the state to demand a clean alternative to the Smith plant. Help say it's time to end this toxic project once and for all. 

Click here if you're considering attending the hearing.

Background

This hearing is our time to make a public demonstration of our opposition to a federal permit that would allow EKPC to impact 14 miles of waterways, burying about half of them under hazardous coal ash. And, it's time to stand up once again in support of the clean and less-costly alternative of energy efficiency, weatherization and renewable energy. All Kentuckians, whether you receive your power from EKPC or not, are stakeholders in this process as the plant would contaminate the air we all breathe and the water we drink. Already, every waterway in Kentucky is already under a fish advisory warning due to mercury contamination from coal burning power plants. Click here to download a flyer with more information about the hearing and the impacts of the permit.

Now is the time to say, “Enough is enough!” The solution is simple and clear. Energy saving and renewable energy programs won’t need a permit because they won’t pollute our water. We must use this opportunity to speak out, letting the U.S. Army Corps of Engineers and EKPC know that this clean energy solution is the just and healthy choice, not only for EKPC ratepayers, but for all Kentuckians.

Share our Facebook event about the hearing.  If you are on Facebook you can invite your friends to the event.

An important step to achieving a clean and economically viable future for rural electric cooperatives, their member-customers, and their local economies will be the establishment of “on-bill financing” programs which will help overcome the up-front costs of implementing energy efficiency and weatherization measures.

The Rural Energy Savings Program Act

(S. 3102 / H.R. 4785)

On March 10, 2010, the Rural Energy Savings Program Act was introduced in Congress. The bill was introduced in both the House and the Senate with bipartisan support.

Under the new program proposed by the bill, the US Department of Agriculture’s Rural Utilities Service (RUS) will create a $4.9 billion loan program available to cooperatives with a zero percent interest rate. Cooperatives in turn will make this money available to consumer members in the form of micro-loans with an interest rate of no more than 3 percent, which can be paid back primarily through savings on their electric bills. This type of loan program is called “on-bill financing” because the loan payments would be made right on the utility bill. Another key component is that the loan would stay with the real property (i.e. the electric meter) rather than with the utility customer.

Bipartisan co-sponsors of the Senate version of the bill (S. 3102) include Senators Jeff Merkley (D-OR), Lindsey Graham (R-SC), Richard Lugar (R-IN), Jeanne Shaheen (D-NH), Tim Johnson (D-SD), and Michael Bennett (D-CO).

A companion bill in the House of Representatives (H.R. 4785), was introduced by Representatives James Clyburn (D-SC), Tom Perriello (D-VA), Ed Whitfield (R-KY), and John Spratt (D-SC).

The National Rural Electric Cooperative Association is supporting the two bills, and you can find more information on their website.

Why this bill is important and its implications for Appalachia

The East Kentucky Power Cooperative (EKPC) is a non-profit electric utility that provides power to 16 rural electric cooperatives across 87 Kentucky counties and is currently in the permitting process for the proposed construction of a new coal‐burning power plant in Clark County, KY, called the Smith plant. About half of the counties served by EKPC are in Appalachia, and about a quarter are coal-producing counties. Many of these are some of the most economically distressed counties in the nation.

A recent report commissioned by Kentuckians For The Commonwealth, Kentucky Environmental Foundation, and the Cumberland Chapter of the Sierra Club found that an investment in a combination of energy efficiency, weatherization, hydro-power and wind power initiatives in the region would generate more than 8,750 new jobs for Kentucky residents, with a total impact of more than $1.7 billion on the region’s economy over the next three years. This alternative approach would meet the energy needs of EKPC customers at a lower cost than the proposed coal plant.

Federal and state policies that make possible on-bill financing for the energy efficiency and weatherization portion of the alternative are important steps toward a clean energy future for EKPC co-ops and their members. Passage of the Rural Energy Savings Program Act is integral to this future, and the jobs and positive economic impact it will bring.

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UPDATE: As of May 12, bill now has 15 co-sponsors for the Senate version. And the House version is now co-sponsored by four of Kentucky's six representatives: Rep. Ed Whitfield (KY-1), Rep. Ben Chandler (KY-6), Rep. Hal Rogers (KY-5), and Rep. Brett Guthrie (KY-2).

Also, we should mention that on the state level, the Mountain Association for Community Economic Development (MACED) is working on a pilot of the on-bill financing idea with four distribution co-ops in eastern Kentucky. MACED and those co-ops are waiting for Public Service Commission approval but are currently working together to get the systems in place to provide on-bill financing options to co-op members. 

The U.S. Environmental Protection Agency unveiled two options today to regulate waste from coal-burning power plants in order to better protect public health and drinking water sources. The two competing alternatives would provide varying levels of protection to the state water resources, and could take years to implement.

“The time has come for common-sense national protections to ensure the safe disposal of coal ash,” said EPA Administrator Lisa Jackson. “We’re proposing strong steps to address the serious risk of groundwater contamination and threats to drinking water and we’re also putting in place stronger safeguards against structural failures of coal ash impoundments. The health and the environment of all communities must be protected.”

Coal ash, also known as coal combustion waste and coal combustion residue, contains toxic chemicals and heavy metals such as arsenic and lead — pollutants that cause cancer, birth defects, reproductive problems, damage to the nervous system and kidneys, and learning disabilities in children.  Kentucky coal-burning plants generate a total of 8.5 million tons of this waste every year, housed at 44 impoundments across the state. Of these impoundments, 7 have been labeled as imminent threats to human health and safety by the EPA. To learn more about it, click here.

One proposal option, the "Subtitle C" option, would designate coal ash as a hazardous waste. This type of waste already has a national regulation and permitting system in place under the federal "Resources Conservation and Recovery Act" (RCRA). Coal-burning power plants and state enforcement agencies would be expected to take steps over the next 5 years to ensure that existing and new impoundments meet these stricter guidelines. A plethora of scientific research has shown that coal ash meets the federal definition of "hazardous" and is also leaching into groundwater and drinking water sources near storage sites.

Under option 2, or non-hazardous regulation, the EPA would require wet coal ash impoundments to be retrofitted with a composite liner, rather than being phased out. If the disposal site chooses not to comply, the regulation would prohibit receiving additional coal ash, and require the closure of the unit within five years. The closure process and post-closure groundwater monitoring would be self-implemented, with no federal or state oversight. The EPA notes that this option would be much more difficult to monitor and enforce.

Both designations would leave in place the rule allowing coal ash to be recycled in so-called "beneficial uses" such as drywall, concrete and other construction materials. Many of these uses are virtually untested for their health effects or have little benefit in application. For example, at the proposed Smith plant, which would generate 520,000 tons of the waste annually, its coal ash would be buried with structural fill, which the company describes as a "beneficial re-use." Both options would also prohibit coal ash disposal in unlined landfills, although disposal in old mining sites would still be allowed.

Jefferson County chapter member Beth Bissmeyer supports the first option. "It's outrageous that storage and disposal of a substance that contains known cancer-causing pollutants has gone unregulated for so long. I live within five miles of the Cane Run Road coal-burning power plant and coal ash landfill and roughly 10 miles from the Mill Creek power station that also stores coal ash. The more I learn about the dangers of coal ash and its harmful effects on the health of people and the environment, the more sickened I become, knowing that the safety and health of my community is being neglected. Seeing the EPA finally take some steps toward coal ash regulation is great, but I hope they go far enough and declare coal ash a "hazardous waste." To do any less would be unjust and unreasonable."

The announcement comes after the EPA failed to meet self-imposed deadlines in the past concerning the designation of coal ash as a hazardous substance. The proposals will be turned over to the public for a 90-day comment period and one or more public and stakeholder hearings, after which the EPA will announce a decision.

“I would want communities to know that I believe, that EPA believes, it is very important to get on with this regulatory process,” said Jackson. “There has been lots of discussion already. We’ve heard from elected officials, from members of congress, from state governments, from private industries. I’d like to hear from public citizens about what they think is the most effective rule.”


In December of 2008, one billion gallons of toxic coal ash burst through a dam near a Tennessee Valley Authority power plant in Kingston, Tenn., polluting the Clinch and Emory rivers and launching the safety of coal ash into the national environmental debate.

The public can make comments on the proposed coal ash regulations until the end of the year once the final rule is posted (check in the next couple of weeks). Make comments by typing in EPA–HQ–RCRA–2009–0640 in the search box at www.regulations.gov.

(Parts of this blog entry are copied from Appalachian Voices)

Locations of coal ash impoundments in Kentucky:

More encouraging news this week in our campaign to prevent construction of a coal-burning power plant in Central Kentucky and bring Kentucky’s rural electric cooperatives back to their democratic principles.

The Public Service Commission released an audit Thursday that found serious issues with East Kentucky Power Cooperative’s governance and financial condition. The audit makes it less likely that EKPC will be able to obtain private financing to build the Smith plant.

The PSC, a three-member board that regulates utilities, had asked for the audit in December 2008 after EKPC’s financial position had declined for several years. The audit looked at governance, strategic planning, interaction of EKPC’s management with its board, and the utility’s operations, including financial systems, business strategies and operating policies.

Among other findings, the independent auditor found that EKPC is threatened by a “real, continuing and hazardous conflict” created by an overriding priority on keeping rates low at the expense of the utility’s financial condition. It also said EKPC has been too reliant on building, owning and operating electric generating facilities and has not sufficiently explored other options such as purchasing power from neighboring utilities.

The audit recommended that changes should ultimately be driven by co-op customers in EKPC’s 16 rural electric cooperatives, which have more than 500,000 customers in 87 counties in eastern and central Kentucky. This will be an important message for co-op members to carry with them as they engage with co-op directors and other members at the co-ops’ upcoming annual meetings. (Stay tuned to this blog and the next issue of balancing the scales for more information about the annual meetings.)

Click here to read the PSC’s press release about the audit. And here to read the full audit.

Last week, EKPC had asked the PSC to temporarily withdraw its application for approval of private financing for the Smith plant so that it might reassess its finances.

Here are links to news coverage of the management audit.

From The Lexington Herald-Leader

From the Public News Service

From The (Ashland) Independent

From CNBC

From The (Maysville) Ledger Independent

A quick and short note out to all our blog readers. A breaking story in the Lexington Herald Leader announces a success in our campaign to halt the proposed coal-burning Smith plant and bring energy efficiency and renewable energy programs instead to Kentucky's rural electric co-ops:

East Kentucky Power Delays Coal Plant

Read all about it at the Herald Leader.

The withdrawal of the request for financing approval is a major victory for environmental groups ... that have hammered the cooperative in recent years for embracing a project that they said was dangerous for Kentuckians because of the health effects of burning coal for electricity...

The groups, including Kentuckians for the Commonwealth, the Kentucky Environmental Foundation and the Sierra Club, have taken actions including commissioning studies showing that the proposed plant would be a major drain on finances and also filing suits to stop the construction process.

And it's great that the article mentions our work toward a solution:

Environmental groups have argued the cooperative would be better off spending money to educate customers about consuming less electricity and to also utilize more renewable sources of energy.

We'll have more soon. But now, time to celebrate that we can go full force on working to bring clean energy to eastern Kentucky's co-ops.

Last week in Washington, D.C., a bipartisan group of U.S. Senators and Representatives introduced a bill that would help rural electric co-ops provide "on-bill" financing for energy saving programs.

The Rural Energy Savings Program Act would provide rural utilities, including the rural electric co-ops, with the means to help folks with the up-front costs of financing energy efficient upgrades to their homes; these utility customers would pay back the utilities on their bill with part of their savings.

Representative Ed Whitfield of western Kentucky is an original co-sponsor of the Act. "[I]t is essential we explore ways to improve energy efficiency and, in turn, better manage the demand for electricity,” Whitfield said. “Increasing our energy efficiency is one of the best proven ways to free up energy on our electricity grid. This bill is a win for American consumers and a win for improving energy efficiency across the country.”

Whitfield is joined by members of Congress from throughout the U.S. and both political parties, as well as by the rural electric cooperatives themselves. Whitfield deserves thanks for stepping out in front on this issue that could be so beneficial to rural electric co-op members across the state. In addition to stopping the proposed coal burning Smith plant, the East Kentucky Power Cooperative could help its members even more with the loans for energy efficiency provided by this bill. It will help their customers save energy, save money, and help prevent further pollution, protecting the public health of Kentucky. If you live in Whitfield's district, you can email him (using the form at this link), or anyone can leave a message for him at his office in D.C. by calling (202) 225-3115. Let him know you appreciate his leadership on the Rural Energy Savings Program Act. 

According to the think tank, The Third Way, "This federal program, run through the Rural Utilities Service, [could] provide low-interest loans to 1.4 million rural households to make energy efficiency improvements, creating 25,000-35,000 jobs each year for the next ten years."

More information on what the Act would do:

Home weatherization improvements create jobs, lower emissions, and save money for consumers. But for most families, the upfront costs are too big and the payoff takes too long. This proposal would eliminate these barriers at a tiny cost to the federal government by providing rural homeowners low-interest loans through rural electric co-operatives. Homeowners would then repay the loans through their utility bills with the cost of the loan fully off-set by energy savings. And if they move, both the loan and the energy savings could be passed on to the next homeowner.

Even the rural electric co-ops, often resistant to progressive energy policy, is backing the bill. According to Hoosier Ag Today:

National Rural Electric Cooperative Association CEO Glenn English said, “This gives us an opportunity to keep the electric bills as low as we possibly can…it gives us the opportunity to avoid building power plants…which will be extremely expensive and have the potential of increasing electric bill costs to our membership.” [...] Typical loans will run between $1500 and $7000, and cover sealing, insulation, heat pumps, heating and ventilation, boilers, and roofs.

Stay tuned to this blog for more information on the bill and what other actions you might be able to take to help move the legislation forward.

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Links for more information:

• Grist: "How to provide relief to rural Americans, create jobs, and lower emissions ... all at once!"
• Press release from Senator Jeff Merkley, sponsor of the bill in the Senate.
  
• A good article in the Charleston (SC) Post & Courier on the bill: "Energy initiative to expand"
  
• The text of the bill from the Thomas Register.

KFTC members have joined other rural electric co-op customers across the state in signing a letter to the Inspector General of the USDA questioning approval of risky financing for the proposed Smith power plant in Clark County.

The letter was submitted today, and KFTC members Steve Wilkins and Barb Bailey spoke to the media on a telephone conference this morning.

The Rural Utility Service, an arm of the USDA, normally provides loans to electric co-ops, but in 2008 the RUS put a moratorium on loans for financially risky coal and nuclear plants. To go ahead with the Smith plant construction, East Kentucky Power Cooperative needed approval from the RUS to seek $921 million from Wall Street banks.

Not only did RUS grant this permission but it also said EKPC could pay back its private loans before paying the billions it already owes the federal government. That means if EKPC defaults on its loans or goes belly-up, ratepayers will foot the bill.

From the letter:

The decision to proceed with financing and building this unnecessary coal plant will force EKPC to seek approval for electric rate increases at a time when many Kentucky families and businesses are already struggling to pay utility bills. This could eventually lead EKPC, which is already financially unstable, to default on its debt obligations. By subordinating its existing mortgage to other financial interests, RUS is placing in jeopardy the billions of taxpayer dollars it has loaned or provided loan guarantees to EKPC, and effectively guaranteeing that our electric rates will substantially increase.

On the press call today, KFTC member Barb Bailey questioned why EKPC needs a new coal-burning plant, when it hasn’t shown a real need and when renewable energy sources are less risky, cheaper and readily available.

“The fact that EKPC doesn’t even really need this plant, and their finances are so shaky – those should have been a deal-breaker for the RUS,” Bailey said. “EKPC could meet their energy needs at a lower cost with energy saving programs and renewable energy.”

To learn more about the entire EKPC campaign, click here.