INDIANA-KENTUCKY ELECTRIC CORPORATION

_____________________________________________ 

 P. O. BOX 16631 

 COLUMBUS, OH 43216 

FOR IMMEDIATE RELEASE 

IKEC TO INVEST $460 MILLION FOR ENVIRONMENTAL 

CONTROLS AT CLIFTY CREEK POWER PLANT 

MADISON, IN, May 11, 2006 –Indiana-Kentucky Electric Corp. (IKEC) announced today 

preliminary plans for investing an estimated $460-million to install additional 

environmental controls at its Clifty Creek power plant located in Madison, Indiana. 

IKEC plans to install flue gas desulfurization (FGD) systems at the facility. The 

Clifty Creek plant has a generating capacity of 1302 MW. FGD systems, commonly 

called "scrubbers," reduce sulfur dioxide (SO2) emissions by as much as 98 percent. 

The Clifty Creek plant has six separate 217-MW generating units. Two absorber 

modules will be built to treat the boiler exhaust. Each module will accommodate three 

generating units. 

"The addition of the FGD systems represents a major commitment to 

environmental quality in southeastern Indiana,” said Ray Wilson, Clifty Creek plant 

manager. “The project will also produce an economic boost to Jefferson County and the 

city of Madison in the form of increased county option income taxes.” 

Engineering and permitting activities are currently under way and construction on 

the Clifty Creek FGD system is scheduled to begin in 2007. The Clifty Creek system is 

scheduled to begin operations in 2010. 

IKEC has engaged American Electric Power Service Corporation to serve as the 

project manager for the construction project. AEP will provide professional services in 

licensing, engineering, design, procurement and construction management for the 

project. 
“The project will produce some changes in the appearance of the plant’s stack 

exhaust,” Wilson explained. “We want to assure our neighbors that the changes actually 

represent an improvement in air quality for the region.” 

Because scrubbers increase the amount of water vapor emitted through the 

stack, the plume will be more visible. “The new plume will essentially be water vapor,” 

said Wilson. “It will be the most obvious sign that the plants’ emissions are cleaner than 

they were before.” A new stack will be built for the plant as part of the overall FGD 

project. 

An FGD system uses both chemical and mechanical processes to remove and 

capture SO2 from a combustion boiler’s flue gas. The SO2 in the flue gas interacts and is 

absorbed into a finely ground limestone slurry. Once dissolved, the SO2 reacts with the 

calcium in the limestone to form a solid compound. A mechanical process removes the 

water from this slurry, and the resultant FGD material, gypsum, is suitable for disposal in 

an appropriate landfill. It is also suitable for conversion to usable building materials. 

The construction project will create the need for temporary labor. Temporary 

positions will be filled through contractors selected to install the equipment. Workers 

from all 14 building trades will be supplied through local and regional union halls. 

Construction employment is expected to peak at 450 workers. Roughly 20 additional 

full-time staff will be required at the plant once the scrubbers are completed and in 

operation. 

“The addition of FGD equipment will enable the facility to continue to comply with 

regional and national air quality standards in the most cost-effective manner,” Wilson 

explained. As part of IKEC’s environmental improvement efforts, selective catalytic 

reduction systems were added to five units in 2002 to reduce emissions of nitrogen 

oxides (NOx.) The NOx reduction systems began operation in 2003. 

Clifty Creek began commercial operation in 1955. 

IKEC and its parent company, Ohio Valley Electric Corporation, were organized in October 1952 by 15 

sponsoring utilities. Parent companies of the sponsoring utilities are Allegheny Energy, Inc. (NYSE: AYE), 

American Electric Power (NYSE: AEP), Buckeye Power, Inc., Duke Energy Corp. (NYSE: DUK), DPL, Inc. 

(NYSE: DPL), E.ON AG, FirstEnergy Corp. (NYSE: FE) and Vectren Corp. (NYSE: VVC).