Frankie Steele

A controversial biomass plant proposed for Eastern Kentucky has moved closer to extinction following a ruling Thursday by the state Public Service Commission.

The PSC rescinded an order that allowed the $1.26 billion wood-burning project to proceed. The move came in response to a state court of appeals decision last month that deemed the plant unnecessary and likely to cause an undue economic burden on the region’s residents.

“As a result, it has no future, thankfully,” said Michael Kurtz, the Cincinnati attorney representing Kentucky Industrial Utility Customers Inc., an association of major energy-consuming companies that had filed suit to contest the PSC’s decision.

“The plant could only be financed and built if the businesses and poor people of Eastern Kentucky were forced to subsidize this grossly uneconomic project,” Kurtz said, adding that the project would have helped only “politically-connected developers.”

A policy group is asking the Federal Trade Commission to scrutinize advertising claims by biomass plants that the energy produced is environmentally friendly and “green.”

Biomass energy is produced when wood products are burned in a power plant. There aren’t any large-scale biomass plants in Kentucky yet, but a company called ecoPower is building one in Eastern Kentucky.

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."