State
Should Study Power Plant Applications 9/05/01
Earlier this summer Gov. Paul Patton issued an order calling for a six-month moratorium on permits for new power plant projects in the state. Since 1999, Kentucky officials have received 24 applications to build electric generating units. Most of the units are designed to be
"merchant plants," which means they have no specific customers to buy the power, and will probably export it to other states.
Entrepreneurs are looking to build the plants in Kentucky because of the state's low energy prices. The availability of coal and other natural resources makes it cheaper to produce power in Kentucky than in other states.
But how will this all affect Kentucky and those of us already using the commonwealth's electric utility lines? What if all 24 plants are approved, constructed, and send an estimated 6,400 megawatts of power through the state's electric transmission system?
Gov. Patton made the right choice by calling for the moratorium and a study of how the new plants will affect Kentucky's electric utility system. It's a level-headed, go-slow approach that parallels the position Kentucky's electric cooperatives have taken on deregulating electric service in the commonwealth.
Other states that have rushed to deregulate the electric industry without thoroughly studying the consequences have seen less than spectacular, and sometimes disastrous, results.
Kentucky's 27 electric cooperatives have issued a position paper that calls for the
"comprehensive study of all relevant issues related to the possible restructuring of Kentucky's electric utility industry."
It further states, "Because electric cooperatives are non-profit, consumer-owned organizations, we are especially committed to keeping rates for all customer classes (residential, commercial, and industrial) as low as possible."
Studying electric utility deregulation should include studying the state's electric transmission system and how it will be affected by the merchant plant projects.
Deregulation in other states, growing demand for electricity, and low rates created the markets that have put Kentucky on the map for entrepreneurs looking to build merchant plants.
The Public Service Commission and other state agencies need to thoroughly examine the power plant projects and what effect they will have on electric consumers and the commonwealth. After all, the consequences of hasty decisions in this arena could be something we will all have to deal with not just in 2001 but for several years to come.
