Climate Challenge Participation Letter

DOE's Energy Partnerships for a Strong Economy

The Climate Challenge Program is a joint, voluntary effort of the United States Department of Energy ("DOE") and the electric utility industry undertaken in pursuit of the President's goals for reducing greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Memorandum of Understanding dated April 20, 1994 ("Climate Challenge MOU"), (see Attachment A to this Participation Accord).

This Participation Accord describes the actions that East Kentucky Power Cooperative, Inc. ("EKPC") and DOE have committed to undertake under the Climate Challenge Program. EKPC's commitments include specific activities and efforts to reduce, avoid, or sequester greenhouse gas emissions. DOE's commitments include specific actions designed to assist EKPC in achieving its Climate Challenge Commitments.

East Kentucky Power Cooperative, Inc., is a nonprofit electric generation and transmission cooperative corporation which provides wholesale electric service to its 18 member systems (the "Member Cooperatives"), each of which is a rural electric distribution cooperative engaged in the sale of electricity at retall to its member-consumers. The Member Cooperatives provided service to over one million Kentuckians located in 89 of Kentucky's 120 counties through the use of approximately 370,000 meters. EKPC has 1308 Mw of installed coal-fired generating capacity at three plants located in Kentucky and will soon commission three combustion turbines representing 330 MW of peaking capacity.

Additionally, the electric cooperatives listed in Attachment B have an ownership interest in and receive bulk electric power from EKPC. Due to this ownership and power supply relationship, the cooperatives in Attachment B will participate in the Climate Challenge Program through EKPC.

I. EKPC Commitments.

A.

Consistent with Paragraph II.B. 1. and Exhibit B of the Climate Challenge Program MOU, EKPC has or will undertake the following actions:

Demand-Side Management:

EKPC will continue its present and ongoing demand-side management (DSM) programs, which include several energy efficiency measures for residential consumers;

such as geothermal heat pumps, insulation/infiltration measures, and energy efficient lighting. Commercial and industrial programs include providing assistance with advanced electrotechnology applications and building efficiency measures. Please see Attachment C for a list of DSM programs, numbers of participants to date and goals through the year 2000.

Generation Efficiency:

EKPC has undertaken and will undertake plant efficiency improvement programs. These include plant instrumentation improvements and turbine/generator modifications. Please see Attachment D for further detail.

Wildlife Habitat Management Program:

EKPC has managed and will continue to manage wildlife habitat areas to promote conservation. As part of this effort, EKPC will plant over 2000 trees over the next four years at its headquarters facility in Winchester, Kentucky. The management plan for this area was developed in conjunction with the Kentucky Nature Preserves Commission and an ecosystems restoration consultant. This area will include wooded wildlife corridor, wooded riparian corridor, oak-ash savannah, prairie and wetlands. At the Spurlock Station in Mason County, Kentucky, EKPC is developing a constructed wetland on an abandoned field. This area will contain hydric plants including shrubs.

In 1994, EKPC donated $25,000 to the Kentucky Nature Preserves Commission for the preservation of Blanton Forest, an old growth forest near Harlan, Kentucky. If not preserved, the forest may have been logged.

Industry-Wide Initiative:

EKPC and its 18 member systems are members of the Earth Comfort Program. This national initiative is designed to:

• reduce the cost barrier to wide-scale customer acceptance of this technology - GHPs cost $2,000 - $3,000 more per unit installed than conventional heat pumps;
  
• communicate benefits and advantages of GHPs to customers and opinion leaders;
  and
  
• develop the infrastructure needed to reduce installation costs and ensure customer satisfaction.

EKPC participated in the development of the Earth Comfort Program and has an employee serving as secretary on the board of directors. Additionally, EKPC has committed $36,000 to the initiative in 1995 and plans to commit at the suggested level of 10 cents per meter for each of the years 1996 through 2000.

B.
EKPC will report to DOE annually on its activities and achievements under the Climate Challenge Program. Results achieved during each year shall be reported in a clear and understandable manner that is consistent with the guidelines adopted pursuant to º1605(b) of the Energy Policy Act and the Supplemental Guidance on Commitment Definitions and Reporting in Exhibit B of the Climate Challenge MOU. The first such report may include a description of the activities and achievements of EKPC prior to its becoming a participant in the program, expressed on an annual basis to the extent possible.

C.

EKPC will confer with DOE no later than December 31, 1996 regarding EKPC's participation in the Climate Challenge Program. The purpose of such meeting will be to evaluate EKPC's progress towards achieving its Climate Challenge commitments and possible adjustments to these commitments based on the availability of reasonable, cost-justified activities for reducing greenhouse gas emissions.

D.

The Climate Challenge representative for EKPC will be Robert Hughes; 4758 Lexington Road, P.O. Box 707, Winchester, KY 40392-0707. EKPC will notify DOE prior to, or in any event, no later than 30 days after any change in contact.

A.
DOE will perform the actions and fulfill the commitments set out in section III of the Climate Challenge MOU.

B.

The Climate Challenge representative for DOE will be Mr. Larry Mansueti, Director, Climate Challenge Program, Office of Utility Technologies (EE-10); 1000 Independence Avenue, S.W., Washington, DC 20585, (202) 586-2588. DOE will notify EKPC prior to, or in any event, no later than 30 days after any change in representative.

C.

DOE will meet with EKPC upon request regarding possible adjustments of the Climate Challenge commitments set forth in subsection I.A. of this Participation Accord.

D.

DOE will consider requests by EKPC to intervene in proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceedings pertaining to EKPC for purposes of addressing Climate Challenge Program issues, it will provide notice to EKPC.

E.

To the extent permitted by applicable law and regulations and by the availability of funds, DOE will consider EKPC's participation in Climate Challenge as a factor to be weighed positively in evaluating applications for financial and other assistance submitted to DOE in support of commitments made by EKPC under this Participation Accord.

F.
DOE agrees to provide public recognition to EKPC for its Climate Challenge activities. DOE will, among other things, prepare an annual report summarizing results achieved under Climate Challenge and highlighting any outstanding achievements or innovative approaches of EKPC.

A.
Use of any DOE-developed materials by EKPC will be governed by the provisions of section IV of the Climate Challenge MOU.

B.

In addition to the foregoing provisions, DOE and EKPC agree to act in accordance with the principles set out in section I of the Climate Challenge Program MOU and the general provisions set forth in subsections V.A, V.B, V.C, V.D, V.F and V.G. of the Climate Challenge Program MOU, which are hereby incorporated by reference.

C.

Either party may withdraw from this Participation Accord or any of the activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.





U.S. DEPARTMENT OF ENERGY

Hazel O'Leary
Secretary of Energy




EAST KENTUCKY POWER COOPERATIVE, INC.
Roy M. Palk
President and Chief Executive Officer

Attachment A - Climate Challenge Program MOU and Exhibits
Attachment B - Distribution Cooperatives Which are Participating in the Climate Challenge Program Through EKPC
Attachment C - Demand-Side Management Program Participation
Attachment D - Generation Efficiency Improvements

Big Sandy RECC                             Inter-County RECC

P.O. Box 1746                              P.O. Box 87

Paintsville, KY 41240-5746                 Danville, KY 40423-0087



Blue Grass RECC                            Jackson County RECC

P.O. Box 990                               P.O. Box 307

Nicholasville, KY 40340-0990               McKee, KY 40447



Clark RECC                                 Licking Valley RECC

P.O. Box 748                               P.O. Box 605

Winchester, KY 40392-0748                  West Liberty, KY 41472



Cumberland Valley RECC                     Nolin RECC

Highway 25E                                612 East Dixie

Gray, KY 40734                             Eiizabethtown, KY 42701



Farmers RECC                               Owen EC

P.O. Box 1298                              510 South Main Street

Glasgow, KY 42142-1298                     Owenton, KY 40359



Fleming-Mason RECC                         Salt River ECC

P.O. Drawer 328                            111 West Brashear Avenue

Flemingsburg, KY 41041                     Bardstown, KY 40004



Fox Creek RECC                             Shelby RECC

P.O. Box 150                               P.O. Box309

Lawrenceburg, KY 40342                     Shelbyville, KY 40066-0309



Grayson RECC                               South Kentucky RECC

109 Bagby Park                             P.O. Box 910

Grayson, KY 41143                          Somerset, KY 42502



Harrison RECC                              Taylor County RECC

P.O. Box 130                               P.O. Box 100

Cynthiana, KY 41031                        Campbellsville, KY 42719

Generation Efficiency

East Kentucky Power Cooperative operates three coal-fired power plants. Efficiency improvements have been made at each facility. The facilities are described below.

William C. Dale Power Station

This power plant is composed of four pulverized coal-fired units. Units 1 & 2 are 22 MW each and went into operation in 1954. Units 3 & 4 were placed in operation in 1959 and 1960 respectively. The plant is located in Clark County near the town of Ford. It uses once through cooling water from the Kentucky River.

Efficiency improvements planned for the facility include:

1.    New steam turbines for Units 3 & 4 are under contract for 1995 and 1996.
 These will improve the heat rate by 300 Btu/kWh.



2.    New combustion controls for 1995 and 1996 to improve boiler efficiency.



3.    New burners for Units 3 & 4 to improve boiler efficiency.

John S. Cooper Power Station

This facility is composed of two pulverized coal-fired units. Unit 1 is a 116 MW unit placed in operation in 1964. Unit 2 is a 220 MW unit placed in operation in 1969. It is located in Pulaski County across the Cumberland Lake from Burnside, Kentucky. It uses once through cooling from the lake.

Efficiency improvements implemented and planned include:

1.    Upgraded turbine steam path to improve turbine efficiency by 100 Btu/kWh in 1993-94.



2.    New boiler controls to improve boiler efficiency in 1993.



3.    New ash handling system to reduce energy consumption.



4.    Improve fuel quality in 1995.



5.    Install new generator step-up transformer with lower losses.



6.    Improve water treatment system to reduce energy requirements is planned.



7.    Fuel switching to higher quality/lower sulfur fuel in 2000.

Hugh L. Spurlock Power Station

1.    Improved turbine steam path to improve turbine efficiency by 100 Btu/kWh in 1993 on

      Unit 2.



2.    Modified plant to provide process steam to a paper mill. This process is more efficient

      than the paper mill provided its own source of steam. This resulted also in a plant heat

      rate improvement of 200 Btu/kWh in 1993.



3.    Installed new precipitator controls to reduce energy consumption in 1994.



4.    Installed new generator step-up transformer with lower losses.



5.    Future modification is planned to the steam path on Unit 1 to improve turbine efficiency.



6.    Modifications are planned to use hot reheat steam for industry to improve efficiency.



7.    Fuel quality changes are planned in 2000 to improve quality and lower sulfur.



8.    Selling at least 25% of flyash for ultimate use in the manufacture of 

      concrete.

Please send comments to: Lawrence.Mansueti@hq.doe.gov