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LG&E asks regulators to build two new gas power plants

LG&E Co. branding sits on the top of a manhole cover on the street.
Ryan Van Velzer
LG&E wants to build two new natural gas power plants and also add solar energy and storage to its portfolio.

Louisville Gas and Electric and Kentucky Utilities formally announced Thursday intentions to build two new natural gas plants, and a smaller amount of solar energy and storage.

LG&E and KU plans would lock ratepayers into paying for new carbon-emitting gas plants for decades as climate scientists warn the world must essentially halve greenhouse gas emissions by 2030 in order to limit global warming to 2.7 degrees and protect the habitability of the planet.

The utilities say the new plants and power agreements will help the utility meet demand while retiring nearly a third of their current generation capacity by 2028. LG&E and KU President John Crockett said further diversifying the companies’ power generation is the least-cost solution to meet ratepayers’ energy needs.

“For decades, coal-fired generation has served our customers well, but many of our generating units are reaching the end of their economic life, and it is no longer cost-effective to make the needed investments to meet increasingly stringent environmental regulations,” said John Crockett, president of LG&E and KU.

In conjunction with the announcement, the utilities filed for approval of their plans with Kentucky utility regulators at the Public Service Commission. To get approval, LG&E and KU must prove that their plans are the least-cost necessary to provide adequate, reliable and safe power generation for ratepayers.

New gas plants

Their plan includes building two new 621-megawatt natural gas combined-cycle units, one at the Mill Creek Generating Station in Jefferson County and the other at the E.W. Brown Generating Station in Mercer County.

Back when LG&E introduced its long-term plan to regulators last year, the utilities said current trends don’t support combined cycle natural gas power plants without adding carbon capture and storage. But now LG&E and KU are asking utility regulators to do just that.

Southern Renewable Energy Association executive director Simon Mahan previously told LPM News that these kinds of carbon-emitting power plants cost hundreds of millions of dollars, have a lifespan of decades and don’t work as well with renewables as other kinds of gas plants.

Essentially, combined-cycle power plants use both gas and steam turbines to more efficiently produce electricity than what are called “simple cycle combustion” turbines. This makes them good for creating what’s called baseload energy, but they’re also more expensive, operate for longer periods of time and generate more carbon emissions.

LG&E/KU officials who wrote last year’s plan said they didn't consider these types of power plants specifically because of their carbon emissions.

“Based on the Biden administration’s energy policy and the national focus on moving to clean energy, the current environment does not support the installation of [natural gas combined-cycle] without [carbon capture and storage] due to its CO2 emissions,” the IRP reads, in part.

Also, utilities in Kentucky are allowed to directly pass on the costs they pay for fuel directly to ratepayers through a fuel adjustment charge. This can leave ratepayers at the mercy of the market. The price of natural gas, for example, has spiked over the last two years.

That’s a cost that ratepayers don’t have to pay when it comes to renewables like solar, the energy for which the sun gives freely.

Renewable energy plans

In conjunction with the new gas plants, LG&E and KU also want to build a 120-megawatt solar array in Mercer County and acquire another array in Marion County. They also want to secure four power purchase agreements for additional solar generation of more than 600 megawatts.

To help store that renewable energy, the utilities are also planning to build 125 megawatts of battery storage at the E.W. Brown Generating Station in Mercer County.

LG&E and KU say they are also proposing the largest energy efficiency program in the companies’ history, aiming to offset the need for future power by reducing overall need by 200 megawatts.

The proposal would expand programs and benefits for low-income customers for things like weatherization, energy audits and smart thermostats.

“We are pleased that, with the help of the members of our Demand Side Management Advisory group – community partners who represent diverse interests – we have been able to develop a robust, cost-effective portfolio of programs that will help us reduce the need for future generation while supporting our most vulnerable customers,” Crockett said.

LG&E, KU and their parent company PPL Electric Utilities Corporation say they are committed to achieving net-zero carbon emissions by 2050 with interim reduction goals of 70% of 2010 levels by 2035 and 80% by 2040. The company also says it’s committed to not burning coal past 2050 unless it can capture the carbon with removal technologies.

LG&E and KU are asking the regulators for approval of their application by Oct. 1, 2023.

Ryan Van Velzer is the Kentucky Public Radio Managing Editor. Email Ryan at rvanvelzer@lpm.org.

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