Another Kentucky Coal Plant Shutting Down

Another coal plant in the heart of coal country is shutting down after Owensboro Municipal Utilities, Kentucky's largest municipal electric retailer, said it would retire Unit 1 of the Elmer Smith Power Plant in Owensboro some time between 2019 and 2020.

The 163-MW Unit 1 opened in 1964. The larger 282-MW Unit 2, which came online in 1974, will remain operating.

Owensboro Municipal Utilities CEO Terrance Naulty told local news station WFPL that the decision was based on the plant's economics, not on regulatory concerns.

"It's not driven by environmental regulations. This is a pure economic decision," he said. "It makes more sense for us to invest in newer, cleaner, cheaper technology than to invest in the older coal-fired generation."

Kentucky has already lost one-third of its coal fleet to retirement or planned retirement since 2011. Of the 56 units in operation at the start of the decade, at least 20 are now either shutdown or slated for retirement. The state is facing steep cuts in its coal generation under the Clean Power Plan (CPP), which requires it to reduce its carbon dioxide emissions almost 50% from 2012 levels by 2030.

Worse, Kentucky's compliance with the CPP is hamstrung by a law enacted by the state legislature last year that bars state regulators from basing their reductions on mandated fuel switching, renewable energy, or other broad policies.

Still, the Kentucky Energy and Environment Cabinet said earlier this year that it might be able to comply with the regulation by building a plan around expected retirements without actually mandating fuel switching. Other officials, including some of Kentucky's congressional representatives, have urged the state to refuse to submit a plan at all, as the state is one of a group that is currently challenging the CPP in federal court.

-Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).

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