Kentucky Power Company announced plans to retire Unit 2 of its Big Sandy Power Station, located in Louisa, Kentucky, in 2015. The decision, announced last month, completed a year-long cycle where the utility, a unit of American Electric Power, first said it would spend $940 million to install a flue gas desulphurization system to lower sulfur dioxide emissions at the 816-megawatt unit. But that plan was withdrawn in mid-2012 in part because installing scrubbers would drive up electric rates by about 31%.

Kentucky Power Company announced that it will spend about $940 million to install dry flue-gas desulfurization (FGD) equipment at Unit 2 of its Big Sandy Power Station in eastern Kentucky. Previously, Kentucky Power planned to close both coal-burning units at Big Sandy and replace the lost output by constructing a new 640-megawatt natural gas-fired combined cycle generator on the site.

American Electric Power Co. Inc may divest Kentucky Power Company. The company would consider a potential sale for Kentucky Power if the state regulators do not approve a customer rate increase to pay for added environmental costs. President of the company, Nicholas Akins said that it may make more sense to sell the utility if regulators balk at allowing American Electric to recover costs of upgrading or replacing a coal-fired power plant. Pat Hemlepp, a spokesman for the company stated that it would cost $470 million to build a natural-gas fired plant to replace Kentucky Power’s 1,078 megawatt Big Sandy coal facility.