Biomass plant still on tap for Perry County

Cris Ritchie — Editor

November 11, 2013

HAZARD – Company officials working to build a biomass power plant in Perry County took another step toward that goal last month when the Public Service Commission approved a proposal for Kentucky Power Company to purchase all of the 58 megawatts that will be generated at the plant. But there remains some uncertainty, however small, after a third party filed an appeal in Franklin Circuit Court to have the case reviewed.

Gary Crawford, CEO of ecoPower Generation, addressed the Coalfields Regional Industrial Authority on Thursday as he gave board members an update on the company’s progress in building the plant, which will burn wood to generate electricity. The company announced its plans in 2009 to build the plant in the industrial park in Chavies.

“I would have much rather been here today and say we’ve got the approval and it’s final and we’re going to start work Monday, but we’re not quite there yet,” Crawford said.

The Public Service Commission’s order approving the sale of power generated at the plant was one of the final hurdles in moving forward with actual construction. Crawford said the order remains valid, but work is not moving forward as planned after the Kentucky Industrial Utilities Customers, which had intervened in the PSC case, has moved to appeal the decision. He said there will be no new evidence presented as the appeal will result in a review of the PSC’s decision, but there is no date as to when the judge may issue his ruling.

In the interim, the company is planning to begin enough work on the site to qualify for a round of tax incentives that will only be available if construction begins this calendar year. If the company qualifies, these incentives could lower the cost of operating the plant, and as a result decrease an estimated 6 percent rate hike to customers of Kentucky Power once the plant is operational.

“We’re working … to give what we call a limited notice to proceed that would be enough work to qualify for those tax incentives while this court issue is working its way through the court system,” Crawford explained.

Construction on the plant is expected to take 30 months and create 200 to 250 jobs over that time period. Once the plant is in operation, the company estimates approximately 400 full time jobs will be created, mostly in functions such as loggers and truckers necessary to support the plant’s operation.

“We started this project in 2009 wanting to develop and create jobs in Hazard, Kentucky, and Eastern Kentucky, and jobs are the most important reason that we’re here,” added Richard Sturgill, a native of Hazard who founded ecoPower and serves as its chairman.

Timber is one of Eastern Kentucky’s best resources, but for years much of it was overlooked, Sturgill said, and trees that would be valuable to a biomass plant were stripped and left alone as companies looked to extract the coal. The plant planned for Perry County will burn that low-grade wood, along with wood from saw mills and lumber production that would have been otherwise considered waste.

“It’s a valuable resource that can create and sustain jobs for many years to come for the people here,” added Sturgill, who also owns a lumber company in the region, where he said nearly 500 people are employed.

With the number of layoffs in the coal industry of late, Sturgill added this plant can help replace some of those jobs, beginning with construction. He said the contractor ecoPower is working with is aware of the workforce available locally, and Sturgill has directed the contractor to hire as many workers from the region as possible.

“We know the quality of the workforce here, we know the education and health care and all the things that surround it are all about jobs,” he said. “If we don’t have jobs people aren’t going to be here, and the worst thing we can do is have a declining population, because when we have that we’re not going anywhere.”

Both Sturgill and Crawford also thanked Kentucky Power Company for their willingness to enter into an agreement to purchase power generated in Perry County, adding that KPC is also working to create jobs in the region. Crawford noted the agreement is for the long term on a fixed rate that will not increase.

“We need to diversify, and we need to grow and expand opportunities for our people,” Sturgill added. “And that’s what we’re about.”