Kentucky approves utility-scale solar buildout amid retirement of fossil fuel power plants

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The Kentucky Public Service Commission (PSC) has approved a major solar energy buildout while also reducing fossil fuel consumption in the state.

The PSC issued a landmark decision on Nov. 6 in a case brought by Louisville Gas & Electric and Kentucky Utilities Co. (LG&E-KU). The order will have major long-term impacts not only for LG&E-KU’s ratepayers, but for the future of energy and the environment in the state.

In the order, the PSC denied construction of one of two proposed gas plants, approved the retirement of two coal plants and three gas plants while deferring retirement of two other coal plants, and approved a major buildout of solar facilities, a utility-scale battery plant, and a significant expansion of customer energy efficiency programs.

The order approved all six of the utilities’ proposed solar facilities, which at a combined 877 MW will produce enough energy to serve about 90,000 homes. The PSC approved the solar facilities because of the “significant savings” they would offer to customers. The commission also approved a 125 MW battery, another landmark development, as this will be by far the largest utility-scale battery in Kentucky. The commission noted the essential role batteries could play in the ongoing energy transition in Kentucky as utilities shift away from fossil fuels to cleaner renewable resources.

The Mountain Association, Metropolitan Housing Coalition, Kentucky Solar Energy Society and Kentuckians for the Commonwealth, who collectively intervened in the case, were disappointed with the PSC’s approval of a new natural gas plant and choice to keep two aging coal plants openHoweverthe order offers major advances for clean energy in Kentucky and indicates that the PSC is weighing the risks of new and existing fossil fuel plants pose to ratepayers.

“This order is a major victory for clean energy in Kentucky,” said Andy McDonald of the Kentucky Solar Energy Society. “LG&E-KU proposed the largest-ever build-out of solar in Kentucky and the Commission approved their entire proposal because it will improve reliability and lower costs for customers.”

The new multi-billion-dollar gas plant will be paid for by ratepayers, the same ratepayers who were left in the dark and cold last winter when gas and coal-fired power plants failed during Winter Storm Elliott. For years, activists have been calling for utilities to invest more heavily in renewable and efficiency programs to avoid just this situation, with little response. LGE-KU must not ignore this opportunity to ramp up efficiency programs, solar energy, and battery storage to make any additional gas plants unnecessary.

This was the first case considered by the Commission since passage of Kentucky Senate Bill 4 earlier this year, a bill aimed at making it harder for utilities to retire old coal plants. The new statute requires utilities to receive approval from the PSC before retiring fossil fuel generators. The ruling provided the first indication of how the Commission would implement the statute.

“Successful energy efficiency programs can save enough energy to offset the need for new power plants and that’s the lowest cost solution for customers. But it takes time to ramp up energy efficiency programs, so utilities need to make their efficiency plans before they start planning for the next generation of power plants,” said Chris Woolery of the Mountain Association. “While we are pleased that LG&E-KU are rolling out these new efficiency programs, there’s so much more they could do. In ‘Pay As You Save’ programs, the utility invests in energy upgrades in customer’s homes and businesses. The investment gets paid back through the utility bill, while the customer enjoys home improvements and lower bills.”

The joint intervenors were represented in this case by the Kentucky Resources Council and Earthjustice, who each provided pro bono legal representation.

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