Community groups are hailing the Kentucky Public Service Commission’s decision this month to reject a proposed gas plant from Louisville Gas & Electric and Kentucky Utilities (LG&E-KU) while greenlighting multiple planned solar installations and coal plant retirements.
The Kentucky PSC’s order authorized LG&E-KU to build only one of two 640-MW natural gas plants that it proposed in its $2.1 billion integrated resource plan and allowed the retirements of the coal-fired Mill Creek Units 1 and 2 and three smaller gas-fired units (2022-00402).
The coal retirements total about 600 MW, while the gas unit retirements will subtract about 47 MW from LG&E-KU’s portfolio. They will take place from 2024 to 2027.
The commission also denied approval of the companies’ requested retirement of KU’s coal-fired Ghent Unit 2 and Brown Unit 3, totaling almost 900 MW. It said the retirements should be deferred until it’s clearer what new environmental regulations will be enforced.
The new gas plant will be located at LG&E’s Mill Creek station. The PSC disallowed LG&E-KU’s proposal for a second new natural gas plant at KU’s E.W. Brown station.
The PSC also allowed all six of LG&E-KU’s proposed solar facilities at a combined 877 MW, a 125-MW battery storage plant and the utilities’ 2024-2030 demand-side management plan that includes more than a dozen new energy efficiency programs.
The storage project will be Kentucky’s largest utility-scale battery. The commission said the solar facilities will offer “significant savings” to customers and noted the critical role battery storage can play in the resource transition.
Intervenors in the case — Mountain Association, Metropolitan Housing Coalition, Kentucky Solar Energy Society and Kentuckians for the Commonwealth — say that the PSC’s ruling is a landmark decision that advances clean energy in a state whose legislature earlier this year enacted a law requiring the commission to review planned fossil-fueled power plant retirements using a presumption that they should remain in operation (SB4).
In a joint press release, the groups said they were disappointed with the approval of a new natural gas plant and the decision to keep two aging coal plants online. However, they said the 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.”
“LGE-KU must not ignore this opportunity to ramp up efficiency programs, solar energy and battery storage to make any additional gas plants unnecessary,” they said.
“The denial of a $650 million, 40-year commitment to a risky natural gas plant is a major victory for ratepayers,” said Catherine Clement of Kentuckians for the Commonwealth. “And the closure of those old Mill Creek coal units will mean better air quality for the people of Louisville and the surrounding region.”
Josh Bills of the Mountain Association said LG&E-KU realizes that the plants are too costly to continue to operate because they require “massive investments to bring them into compliance with air and water quality regulations.” He said the Kentucky PSC’s order establishes a course for future coal plant retirements and “importantly” acknowledges that energy efficiency programs and distributed resources can reduce demand enough that the output from the Ghent and Brown units might not need to be replaced with an expensive new gas plant.
Chris Woolery, representing the Mountain Association, agreed that successful energy efficiency programs could shave enough demand to offset the need for a major power plant.
Tony Curtis of the Metropolitan Housing Coalition said his organization is looking forward to assisting LG&E-KU on implementing the new energy efficiency offerings, especially for those who “struggle to pay their bills each month and can really benefit from home energy improvements.”
After the PSC’s order, PPL — the parent of LG&E-KU — said in a U.S. Securities and Exchange Commission filing that the utilities’ planned capital investments in new and existing facilities in Kentucky are “materially consistent” with the utilities’ original $2.1 billion plan.
John Crockett, president of LG&E-KU, said the utilities are “pleased” that the PSC approved many aspects of the original plan.
