LG&E/KU underestimated energy demand ahead of winter storm Elliott
Tens of thousands of Louisville Gas & Electric and Kentucky Utilities customers experienced rolling blackouts on the coldest day of the year in 2022.
As ratepayers turned up the heat, there wasn’t enough power to go around. LG&E and KU underestimated energy demand, couldn’t get the natural gas it needed and faced limited options in purchasing additional power.
Winter storm Elliott swept across the country in the days leading up to Christmas carrying arctic air that killed two people in Kentucky and dozens more across the U.S. The high winds and heavy snow canceled or delayed tens of thousands of flights and left as many as 1.6 million customers without electricity across the East Coast.
The freezing temperatures led to a surge in heating demand that pushed utilities and grid operators to the brink across the Southeast. Duke Energy, Tennessee Valley Authority and LG&E and KU were among the utilities that engaged in rolling blackouts to avert significantly more widespread power outages
LG&E & KU issued a media alert after 8 p.m. on the 23rd warning of “scattered power outages” and asking customers to lower thermostats, wear extra layers and turn off unnecessary lights.
By then, the utility had already begun rolling blackouts across its service territory. The blackouts lasted between 6 and 9 p.m. and affected approximately 53,000 LG&E/KU ratepayers. LG&E spokesperson Natasha Collins said that’s less than 5% of all ratepayers.
“LG&E and KU took decisive measures — performing brief service interruptions, in intervals, across the service territories Friday evening; requesting customers’ help in reducing energy consumption; and securing additional supply needed to return to normal service,” Collins wrote in an email.
Friday, Dec. 23rd, was the coldest day of the year in Louisville at negative 5 degrees, according to the National Weather Service of Louisville. The demand for home heat broke the utility’s record for daily total energy usage for December set back in 2010.
As the same problems played out across the Southeastern U.S, the demand for natural gas became so great that an interstate natural gas pipeline couldn’t maintain the required pressure to supply LG&E power plants, Collins said. On top of that, LG&E faced regional supply issues that limited its ability to buy power from other parties, she said.
“The interconnected nature of utilities nationwide and stable operation of the U.S. power grid requires a delicate balance between energy demand and supply. Maintaining this balance is critical,” Collins wrote in an email.
Around 11 a.m. on Dec. 23rd, LG&E and KU’s gas units began generating less electricity, said Simon Mahan, Southern Renewable Energy Association executive director, who analyzed data LG&E provides to the U.S. Energy Information Administration.
Across the Southeast, power stations faced similar supply problems. Mahan said natural gas equipment froze and compression stations failed making it more difficult to move the gas across the region.
LG&E made up for the difference by purchasing additional power from regional transmission organizations including Midcontinent Independent System Operator (MISO) and PJM Interconnection. These grid operators help to coordinate, control and monitor electrical power across broad regions of the U.S.
“Without those connections it would have been much worse for Kentuckians and LG&E/KU customers,” Mahan said.
LG&E said the majority of those market purchases won’t be passed on to customers.
‘Caught with your pants down’
LG&E and KU was one of several utilities in the region that significantly underestimated the amount of power they’d need for the winter storm, said Mahan with the Southern Renewable Energy Association.
Peak demand on the 23rd was around 16% higher than LG&E/KU had forecasted, according to hourly data from the U.S. Energy Information Administration. The chart reflects LG&E's demand as well as some smaller municipal utilities, but Mahan said it would not be enough to account for the discrepancy in forecasting.
When a power company underestimates demand, they’re unable to ramp up the coal and natural gas generating units fast enough to meet it.
“You basically get caught with your pants down because you weren’t able to make that demand forecast accurate enough,” Mahan said. “They were off by 1.2 gigawatts. That's a lot. That’s a lot for that small of a region.”
One gigawatt is equal to 1,000 megawatts. That’s enough power to illuminate 100 million LED light bulbs.
In response, Collins with LG&E said the utility had the necessary generation resources and had purchased the fuel necessary to meet demand, but regional circumstances limited their ability to meet customer demand.
“As part of our overall resource planning, we anticipate the range of customer demand expected and, knowing any number of factors could impact demand, we maintain a reserve margin – which is essentially extra generation capacity – on hand to serve customers in the event the load is higher than forecast or if certain generation is not available,” she said.
Renewables to the rescue
The regional transmission organizations PJM and MISO both rely on more renewable energy than LG&E and KU. MISO in particular had significant amounts of wind power online and was able to help supply electricity to the Southeast, Mahan said.
Winter storm Elliott and winter storm Uri, which hit Texas in 2021, have demonstrated that renewables including solar and wind improve the reliability of the power grid, Mahan said.
“Having a diversified portfolio is the best way to defend against these extreme weather events,” Mahan said. “We saw MISO did not have rolling blackouts, PJM didn’t have rolling blackouts, and without those markets nearby, things would have been a whole lot worse for Kentucky.”
LG&E and KU are currently seeking approval from utility regulators to build two new natural gas plants and a smaller amount of solar energy and storage.
The Federal Energy Regulatory Commission and the North American Electric Reliability Corporation are now investigating how the cold weather contributed to power outages for millions across the country.
“This storm underscores the increasing frequency of significant extreme weather events (the fifth major winter event in the last 11 years) and underscores the need for the electric sector to change its planning scenarios and preparations for extreme events,” NERC President and CEO Jim Robb said in a press release.