Special Subcommittee on Energy


Minutes of the<MeetNo1> 5th Meeting

of the 2016 Interim


<MeetMDY1> October 21, 2016


Call to Order and Roll Call

The<MeetNo2> 5th meeting of the Special Subcommittee on Energy was held on<Day> Friday,<MeetMDY2> October 21, 2016, at<MeetTime> 10:00 AM, at the H.L. Spurlock Station, East Kentucky Power Cooperative, Maysville, KY<Room>. Representative Dean Schamore and Senator Jared Carpenter, Co-Chairs, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Jared Carpenter, Co-Chair, and Representative Dean Schamore, Co-Chair; Senators Brandon Smith, Johnny Ray Turner, and Robin L. Webb; Representatives Rocky Adkins, Leslie Combs, Tim Couch, Jerry T. Miller, Sannie Overly, and Tom Riner.


Guests: Don Mosier, Executive Vice President and COO, and Joe VonDerHaar, Plant Manager, East Kentucky Power Cooperative, H.L. Spurlock Station.


LRC Staff: D. Todd Littlefield, Janine Coy-Geeslin, and Susan Spoonamore, Committee Assistant.


Welcome and Introductory Presentation

Mr. Mosier described East Kentucky Power Cooperative as one of the largest electric generation and transmission (G&T) cooperatives. EKPC is not-for-profit and is owned by 16 rural distribution cooperatives. The mission statement is to safely deliver reliable, affordable energy to the owner-members. EKPC employs 711 people and serves 1.1million customers. Its owner-member cooperatives serve 87 counties in Kentucky. The two key coal-fired generating facilities are the H.L. Spurlock Station, which employs 230 employees, and the John Sherman Cooper Station in Burnside, Kentucky. The J.K. Smith Station in Trapp, Kentucky and the Bluegrass Generating Station in LaGrange, Kentucky are powered by natural gas.


Mr. Mosier explained that EKPC joined the PJM Interconnection system in 2013. EKPC sells all of its power into that system and buys back out of it. EKPC recently filed for a Certificate of Public Convenience and Necessity (CPCN) for a new 8.5 MW solar facility on 60 acres in Winchester that would have 32,000 panels. As part of a strategic plan, EKPC is diversifying its portfolio. A significant concern is navigating the Environmental Protection Agency’s regulations on coal. Another issue is the abundance of shale gas resources that will keep natural gas prices low, at least in the near future.


In response to Representative Overly, Mr. Mosier said that the J.K. Smith Station is located in Clark County.


Mr. Joe VonDerHaar stated that the H.L. Spurlock Station has approximately 230 EKPC employees who work in operations, maintenance, engineering, and planning. The Spurlock Station burns approximately 4.5 million tons of coal and one million tons of limestone per year. The station has four planned outages per year so the units can be cleaned and checked.


In response to Representative Couch, Mr. VonDerHaar said that, if implemented, the clean power plan would have a substantial negative impact on the Spurlock Station.


In response to Representative Miller, Mr. VonDerHaar said that the Spurlock Station is compliant with every rule of the EPA except for the clean power plan. EKPC is working on effluent limitation guidelines (ELG) in order to comply with the EPA rules. Units 1 and 2 cost more per megawatt than units 3 and 4, but not much.


In response to Representative Riner, Mr. VonDerHaar said that all EKPC stations are computer dependent. Power stations would be vulnerable to electromagnetic pulses or solar flares. He said that another EKPC representative would need to talk to discuss electromagnetic pulses or solar flares. EKPC has an initiative for cyber and physical security. Mr. Mosier said that he belongs to the PJM membership team for international security. The subject of electromagnetic pulse is a national security issue.


In response to Co-Chair Representative Schamore, Mr. Mosier said that EKPC is involved with Kentucky Homeland Security and that EKPC is committed to ensuring cyber and physical security. Representative Schamore said that the Kentucky National Guard has a cyber unit team that can be deployed.


Mr. Mosier explained that the control systems to the units that are on the tour, are not connected to the outside world. Mr. VanDerHaar stated that EKPC is a member of the North American Electrical Reliability Council (NERC).


In response to questions from several legislators, Mr. Mosier said that the International Paper Company relies on the H.L. Spurlock Station for power and steam. The two facilities employ 500 people. The H.L. Spurlock Station serves approximately 500,000 customers. The two coal stations burn about four million tons of coal per year, and one million of that is Kentucky coal. The coal units always have about 50 to 60 days worth of coal on-site. The next generation asset will be a natural gas combined cycle plant, but EKPC is looking at other types of technology. EKPC does not have a research and development department. EKPC will contract with major architect engineers for specialized needs.


There being no further business, the meeting was adjourned.