Sierra Club, represented by Earthjustice, submitted expert testimony challenging Kentucky Power Company’s (KPC) plan to charge its ratepayers $940 million to retrofit the company’s existing 816MW Big Sandy Unit 2 coal plant. The testimony from experts at Synapse Energy Economics was submitted to the Kentucky Public Service Commission which is considering KPC’s plan. (Read testimony by Jeremy Fisher, Rick Hornby and Rachel Wilson.)

The experts found KPC made numerous errors in calculating that it would be most cost effective to pour close to one billion dollars into the aging Big Sandy plant. KPC initially claimed to agree that ratepayers would be best served if it closed the old, highly-polluting coal plant but later changed that decision. Customer rates will rise by more than 30 percent if the Kentucky Public Service Commission approves the plan to retrofit the Big Sandy coal plant.

Previously the Kentucky Industrial Utility Customers, a representative of major eastern Kentucky employers, including AK Steel, Air Products & Chemicals, and Marathon Petroleum, filed expert testimony similarly urging the Commission to reject Kentucky Power Company’s proposal, given its impact on ratepayers. The Kentucky Attorney General also submitted testimony.

“There might not be many issues on which the Sierra Club agrees with the oil and chemical industry in eastern Kentucky,” said Lauren McGrath, a representative of the Sierra Club. “But we agree on this—the best and cheapest way forward for Kentucky ratepayers is to retire the old Big Sandy plant.”

Synapse Energy Economics’ testimony demonstrates that replacing the Big Sandy coal plant with energy efficiency, renewable energy, and cleaner natural gas generation would be a much better deal for ratepayers.

“The evidence shows that Kentucky Power’s $940 million rate increase would impose a large and unnecessary burden on Kentucky ratepayers,” said Shannon Fisk, attorney for Earthjustice. “Let’s save money and protect public health by retiring Big Sandy, replacing it with cleaner energy sources, and providing a fair transition for the Big Sandy workers and community.”

A hearing in the proceeding is scheduled for April 16, 2012 at the Commission’s offices in Frankfort, Kentucky.

The parties’ testimony is available on the Commission’s electronic docket, located at: http://psc.ky.gov/Home/Library?type=Cases&folder=2011%20cases/2011-00401