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SITING BOARD DENIES PERMIT FOR CLARK COUNTY PLANT Says Kentucky Pioneer Energy must first comply with local zoning regulations

FOR IMMEDIATE RELEASE CONTACT: Andrew Melnykovych April 15, 2003 (502) 564-3940 ext. 208 (502) 330-5981 (cell)

FRANKFORT, KY - The Kentucky State Board on Electric Generation and Transmission Siting (Siting Board) today denied the application of Kentucky Pioneer Energy LLC to construct a 540-megawatt generating plant near Trapp in Clark County.

The Siting Board based its denial on Kentucky Pioneer Energy's failure to demonstrate compliance with local planning and zoning regulations in effect on the date that the application was filed. The Siting Board rejected Kentucky Pioneer Energy's contention that it is exempt from local planning and zoning requirements.

The proposed plant would sell electricity on the open, wholesale market and be fueled by synthetic gas produced on-site from a mixture of coal and refuse-derived fuel, created by processing municipal solid waste.

The Siting Board was created by a law enacted by the 2002 Kentucky General Assembly in response to concerns about a large number of proposals to build merchant power plants- also know as independent power producers, or IPPs - in Kentucky. In 2001, Gov. Paul Patton placed a moratorium on new IPP construction until the General Assembly had a chance to address the issue.

Local concerns, including planning and zoning, are at the heart of the law creating the Siting Board, the board noted in its order.

The language and history of the law "not only demonstrate the Legislature's commitment to local planning issues, but also require the (Siting) Board to carefully consider local concerns in rendering its decision," the order says. Furthermore, the law makes clear "the General Assembly's intent to subject proposed merchant plants to local planning and zoning guidelines."

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While Kentucky Pioneer Energy met some of the criteria set forth in the siting legislation, that does not compensate for its failure to comply with planning and zoning requirements, the Siting Board said. The Siting Board also noted that Kentucky Pioneer Energy, in its application, certified that it would comply with local planning and zoning requirements, but later claimed it was not subject to those requirements, in effect withdrawing the certification.

Given that the application could not even be considered without the certification of compliance with local planning and zoning, the Siting Board said it had no choice but to deny Kentucky Pioneer Energy a construction certificate.

Nevertheless, the Siting Board denied the application without prejudice. If Kentucky Pioneer Energy complies with Clark County's planning and zoning requirements within the next six months, the Siting Board will reconsider the application.

The Siting Board last year granted a construction certificate to Kentucky Mountain Power LLC for a 520-MW coal-burning facility in Knott County. Three other companies have filed notices of intent to submit applications. They are: * Thoroughbred Generating (Peabody) - Muhlenberg County * Estill County Energy Partners (Calla Energy) - Estill County * Westlake Energy Corp. - Calvert City, Marshall County

The Kentucky Pioneer Energy order and other documents in the case are available on the Siting Board Web site:

The case number for Pioneer Energy is 2002-00312.





Andrew Melnykovych Director of Communications Kentucky Public Service Commission 502-564-3940 x208

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