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Dear Customer:
On June 1, LG&E and KU filed with the Kentucky Public Service Commission for $2.5 billion in upgrades at several of our coal-fired power plants. These upgrades are necessary for us to meet new U.S. Environmental Protection Agency regulations. I want to assure you that, while costs are increasing due to the new requirements imposed by the EPA-mandated regulations, LG&E and KU remain committed to providing you with a secure energy supply in the least-cost manner. We have carefully studied the options to meet the stricter regulations and have developed a compliance strategy that offers the least financial impact to you and all of our customers.
The costs associated with meeting these requirements will likely force us to retire several of our older plants: Cane Run, Green River and Tyrone. We continue to evaluate the data to determine how best to replace the electricity that will be lost as a result of retiring these plants. Whatever decision is made, we expect the costs associated with replacing the energy we need to meet your needs to add $800 million above and beyond the $2.5 billion in our Environmental Cost Recovery filing.
While we are proud of our legacy as environmental stewards in the utility industry, the latest EPA-mandated regulations significantly tighten the requirements we must follow and add a large financial burden on all of us.
As always, we are concerned about the impact on you and the Commonwealth of Kentucky. We agree that the additional regulations being placed on coal-fired utilities are significant, and we continue to push for a more measured approach by the U.S. Environmental Protection Agency. However, LG&E and KU will comply with these federal regulations, as we have always done, and find the best, least-cost method to continue to provide you with the safe, reliable service you deserve.
Rest assured, we will keep you informed of this issue as it progresses.
Sincerely,
Vic Staffieri
Chairman, CEO and President
(Please refer to press release for more information.)