In giving its consent, the PSC said the statutory standard in the case dealt with whether the Mitchell plant acquisition was necessary in light of Kentucky Power's decision to close the Big Sandy unit, and whether it was the lowest-cost option available.
"Arguments on economic benefits to specific areas of Kentucky Power's service territory are beyond the scope of the commission's jurisdiction," the agency wrote.
Regulators said Kentucky Power customers would have faced much higher rates if the utility had opted for the Big Sandy upgrade.
Kentucky Power said it agreed to seek regulatory approval to convert its 278-megawatt Big Sandy unit to burn natural gas instead of coal. That unit also is scheduled to stop using coal in 2015.
Closing the larger Big Sandy unit and switching to the West Virginia power plant was "the most cost-effective way to meet federal environmental rules and continue providing reliable, affordable electricity to all our customers," company President Greg Pauley said.
"We care about the employees who work at Big Sandy and the businesses and residents in Louisa and Lawrence County and are committed to working with them through the transition," he said.
The plant employs about 80 people and expects to need 25 to 35 fulltime workers for the smaller unit.
Even if the smaller plant keeps churning out power, Lawrence County is bracing for a big drop in tax revenue from Big Sandy. The plant contributes more than $900,000 a year in local property tax revenues, with slightly more than half going to the schools.
Rachel Thacker, co-owner of a hardware store in downtown Louisa, said the county will struggle to offset the lost jobs and revenue "if we don't get some type of industry in here."
Kentucky Power recently paid for a consultant to assess Lawrence County's needs to expand its economy. The consultant concluded the county needs to increase sewage capacity - a multimillion-dollar venture, Lawrence County Judge-Executive John Osborne said.
"We know what the problem is, but where are we going to get the money to build a sewer plant?" he said.
Kentucky Power initially pledged to spend $100,000 in each of the next five years for economic development initiatives in Lawrence County and neighboring counties, where as many as one in three people live at or below the federal poverty level, according to Census data. The commission directed Kentucky Power to contribute at least $233,000 annually, a figure Hogan still called "a slap in the face."
Part of the money will go for job training. County leaders are skeptical the money will filter down to help many people.
"It'll be spent more on development and research to tell us what we need," Osborne said. "It'll be money to go to somebody else's pocket, but as far as to actually creating anything for the county, no."
Osborne added: "If you do train them, where in the heck are they going to get work?"