of Zfienturhg P.O. DRAWER 8850 PIIEVILLE, KY 41502 (606) 432-57 '77 RAY S. JONES, II STATE SENATOR CAPITOL ANNEX FRANKFORT, KY 40601 (502) 564-8100 EXT. 681 31"' SENATE DISTRICT July 13, 2011 Mr. Gregory G. Pauley President and COO AEP - Kentucky Power Company 101A Enterprise Drive Frankfort KY 40601 Dear Mr. Panley: It has come to -my attention that your company is considering purchasing power from the planned ecoPower Generation plant in Hazard, Kentucky. I have followed the development of this project and am very encouraged by and supportive of the benefits it brings to Eastern Kentucky. I work diligently go diversify the economy, create jobs, and increase income in the region. This project is an important element of that effort. Economic impact analysis indicates that it will create about 500 permanent jobs, 250 construction jobs, and inject over $18 million annually into the local economy. I am aware that impending EPA regulations are putting undo pressure on AEP and Kentucky Power to look for new sources of electrical generation. The ecoPower project offers a local solution to a portion of Kentucky Power's environmental compliance requirements. Ibelieve that a local solution is extremely important because it generates local income rather than exporting wealth to other states through purchase power agreements. Like everyone else, I am concerned about the impact of environmental compliance on future power costs. There is no escaping the fact that electricity rates are going to be higher in the future. I also recognize the cost of biomass generation will be somewhat higher than traditional generation, but want to assure you of my support of your cost recovery of these additional costs at the PSC and among my constituents, should Kentucky Power choose to purchase electricity from ecoPower. I, therefore, urge you to give serious consideration to the ecoPower power purchase opportunity. Sincerely, Ray S. Jones, II Kentucky State Senate