The Kentucky Public Service Commission has approved a deal for an Eastern Kentucky utility to buy electricity from biomass.
The proposed biomass plant will be in Perry County, and is expected to be operating by 2017. It’ll burn wood scraps for energy, and replace some of the capacity from the coal-fired Big Sandy power plant. Big Sandy will be retired soon, in the face of tougher pollution regulations.
Usually, the commission has to decide a case based on what electricity is the least-cost reasonable option. But PSC spokesman Andrew Melnykovych says this case was different.
"The legislature directed the PSC in a bill that was passed in the last session to essentially approve power supply contracts from biomass plants. And that is what the PSC did today."
The deal was opposed by consumer groups and the Kentucky Attorney General. They argued the plant has a net negative economic benefit, once ratepayers feel the effects of a 7 percent rate hike.