Louisville Gas and Electric Co. (LG&E) on Monday said it would shut down three coal units in Kentucky—a total capacity of 563 MW—eight months earlier than originally planned.

The PPL Corp. subsidiary said that it had begun construction of a new natural gas combined cycle unit and would shut down three coal units at Cane Run near Louisville, Ky. The company had announced the closures in 2010, saying it would convert the 57-year-old plant to natural gas in response to tightening environmental rules.

A new natural gas combined-cycle unit is now expected to begin serving customer needs in May 2015 allowing for the early closure of the coal units, the utility said. "Having received timely certificates and permits from the Kentucky Public Service Commission and other regulatory agencies, we were able to get a quick start on the project and now should be able to retire the coal-fired units sooner than expected," said Paul W. Thompson, senior vice president of Energy Services.

The company said preliminary work has already started at Cane Run. The transmission lines on the property are being moved, and the communications tower has been relocated to make room for the new natural gas combined-cycle plant.

Bluegrass Power Constructors, which will build the plant, is expected to begin mobilizing later this year with full construction beginning in the first quarter of 2013. A contract with the construction specifies the May 2015 completion timetable and has penalties should Bluegrass exceed that period.

The Cane Run plant began operation in 1954, and by 1969, had a total of six coal-fired units in operation. Units 1, 2 and 3 were retired in 1987. The remaining three units have a net generating capacity of 563 megawatts.

Earlier in April, LG&E and the Louisville Metro Air Pollution Control Board reached an agreement that called for the utility to pay $22,500 to settle alleged violations for alleged coal ash and sludge-handling violations. The violations are still under review.

In September, LG&E withdrew a 2010-filed permit application for a new 5.7-millioncubic-yard, 14-story-tall coal ash pond about 1,500 feet from the existing one at Cane Run from the state’s Division of Waste Management. "The withdrawal of the landfill permit application amounts to a savings of about $54 million, which was the estimated total capital cost of the proposed four-phase landfill expansion."

Sources: POWERnews, LG&E

—Sonal Patel, Senior Writer (@POWERmagazine)