As headlines go, this one doesn’t exactly scream for attention. “LG&E to convert Cane Run power plant

Cane Run is a coal fired power plant outside of Louisville, Kentucky. In the next few years it’s going to be replaced with a new facility. (Really exciting so far, eh?)

Louisville Gas & Electric Co. intends to replace its 57-year-old coal-fired Cane Run Station in Louisville with a new plant next door powered with cleaner-burning natural gas by 2016.

The 640-megawatt natural gas unit would be built on the power plant site along the Ohio River in southwest Jefferson County, where the company also has a large coal waste landfill and ash pond, company officials announced on Thursday.

LG&E and its sister company, Kentucky Utilities, also announced that they are asking the Kentucky Public Service Commission to approve their purchase of the Bluegrass Generation Co.’s plant in Oldham County with its three natural gas turbines. That plant in Buckner began electricity production in 2002.

Right up front I should point out that I have no problem with old, inefficient, coal fired plants being upgraded to natural gas when they reach the end of their life. Natural gas is a fine energy source, burns pretty cleanly, and we’ve got lots of it in the United States. Such conversions are a business decision which many communities may decide to make. However, there’s one problem with the LG&E story: they aren’t doing this on their own schedule. They’re being forced into it prematurely to meet new EPA regulations, and it’s going to come with a hefty price tag. The company had originally anticipated being able to keep the plant in service for a minimum of twenty more years, and possibly longer with new technology upgrades.

“’The ever more stringent environmental regulations have forced us to take a hard look at how we generate electricity, howwe will comply with the new federal EPA requirements, and how to best limit the potential cost increase on our customers and the community,’ said Paul W. Thompson, senior vice president of energy services for the two companies, in a written statement.”

Just how costly will it be? Their initial estimate is that it’s going to run more than $800M to switch over now. (Gee… I wonder who’s going to wind up paying for that?) And there’s an additional cost besides the raw monetary bill. When you shut down a plant like this, you suddenly lose more than 200 … what do you call those things again? Oh, yes… jobs. It may come as some comfort to the workers that a company representative said they will, “try to retain” as many of them as they can.

This is just one local story, but it’s part of the larger battle being waged over the EPA’s Utility MACT Rules. (Maximum achievable control technology.) There are plenty of other examples rolling out today. For an additional case study, see what’s going on in Indianapolis. We were warned well in advance that there were going to be real world consequences from these regulations and they would come in the form of lost jobs and reduced energy supplies, particularly during high demand periods. We’re going to see a similar situation playing out in Texas next year, so stay tuned and hang on to your ten gallon hats. It may turn into a bumpy ride from here on out.