Direct Testimony of Jeremy Fisher, Ph.D. On Behalf of Sierra Club

Jeremy Fisher, Ph.D., testifying for the Sierra Club, argues that Kentucky Power Company's (KPCo) analysis erroneously favors retrofitting the Big Sandy 2 unit. He identifies significant flaws in the Strategist and Aurora models, including underestimated capital costs for the retrofit, overestimated costs for natural gas combined cycle (NGCC) replacements, and an unrealistically low carbon dioxide (CO2) price forecast. Fisher asserts that when these errors are corrected and off-system sales are properly allocated, alternatives such as NGCC replacement or market purchases are substantially more cost-effective than the FGD retrofit.

• Correcting errors in the Company's Strategist analysis reveals that every alternative—including repowering Big Sandy 1 as a natural gas unit, replacing Big Sandy 2 with a brownfield NGCC, or purchasing market power—is more cost-effective than the FGD retrofit.
• The Company's analysis incorrectly allocated all off-system sales (OSS) revenues to ratepayers, whereas KPCo currently allocates 40% of OSS revenue to shareholders. Adjusting for this split increases the cumulative present worth (CPW) of Option 1 (retrofit) by nearly $400 million.
• Capital costs in the Strategist model were inconsistent with the Company's own direct testimony, with FGD retrofit costs depressed by about 11% and replacement NGCC costs inflated by approximately 43%.
• The Company's base CO2 price forecast is the lowest reference case price reviewed by the witness among 22 diverse U.S. utilities, and it is described as a "token price" that does not reflect likely carbon policy or industry standards.
• Applying a "Synapse Low CO2 Price" (starting at $15/ton in 2020 and rising to $45/ton by 2040) makes the retrofit essentially equal in cost to NGCC replacement and far less economic than market purchases to 2020.
• The Aurora model is criticized for a lack of transparency, as provided worksheets arrived without formulae and the reported input distributions for coal and CO2 prices do not correspond to the model data.
• The correlations used in the Aurora model are described as faulty and biased, specifically citing an erroneous use of coal tonnage instead of coal prices, which inflated the correlation between demand and fuel price from 0.08 to 0.74.
• The witness identified a suspicious drop in fixed O&M costs for the Big Sandy 2 FGD unit in 2030, decreasing by approximately $36 million per year (nominal) without a reasonable explanation.

APA

Fisher, J. (2011). Direct Testimony of Jeremy Fisher, Ph.D. On Behalf of Sierra Club. Earthjustice. https://earthjustice.org/wp-content/uploads/jeremy-fisher-testimony.pdf

Chicago

Fisher, Jeremy. Direct Testimony of Jeremy Fisher, Ph.D. On Behalf of Sierra Club. Earthjustice, 2011. https://earthjustice.org/wp-content/uploads/jeremy-fisher-testimony.pdf.

Wikipedia

{{cite report |last1=Fisher |first1=Jeremy |title=Direct Testimony of Jeremy Fisher, Ph.D. On Behalf of Sierra Club |publisher=Earthjustice |date=12 March 2011 |url=https://earthjustice.org/wp-content/uploads/jeremy-fisher-testimony.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fisher2011direct, author = {Fisher, Jeremy}, title = {{Direct Testimony of Jeremy Fisher, Ph.D. On Behalf of Sierra Club}}, institution = {Earthjustice}, year = {2011}, month = mar, url = {https://earthjustice.org/wp-content/uploads/jeremy-fisher-testimony.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }