Kentucky Power’s Application for a CPCN to Construct a New Cooling Tower at the Mitchell Power Plant
Synapse provided expert testimony and analysis to support Sierra Club in evaluating Kentucky Power’s application for a Certificate of Public Convenience and Necessity (CPCN) to construct a new mechanical draft cooling tower at unit 2 of the coal-fired Mitchell Power Plant. The existing cooling tower at the site has structural damage that prevents its continued operation long-term.
Synapse’s analysis focused on assessing whether Kentucky Power adequately compared its proposed solution to alternatives, including retiring and replacing the unit. We found that Kentucky Power failed to appropriately compare the full forward-going, avoidable cost of the four resource portfolio options it considered. Specifically, the Company’s analysis omitted all costs associated with maintaining Mitchell 2 through 2040 (other than those specifically associated with the cooling tower), it used a depreciation timeline for the draft cooling tower that did not align with Mitchell’s retirement date, and it did not account for differences in accredited capacity and energy between the scenarios it modeled.
Synapse recommended that the Commission deny Kentucky Power’s request, based on the insufficient evidence the Company presented to justify that constructing the cooling tower is the lowest-cost option for ratepayers. We also recommended that the Commission instruct Kentucky Power to provide industry-standard capacity expansion and production cost modeling to support its requests to make major capital investments in existing resources or build new resources in this and all future CPCNs.