Kentucky’s largest utility will retire some coal-fired power, boost renewable energy

Public Service Commission leaves open future power plant retirement decisions

By: - November 7, 2023 6:41 pm

E.W. Brown solar array at KU’s Mercer County plant. (Photo courtesy of LG&E/KU)

Kentucky’s utility regulator has given a green light to plans by the state’s largest utility to retire some of its coal-fired generation, build  a natural gas-fired plant in Jefferson County and add renewable energy to its power generation portfolio. 

Louisville Gas and Electric and Kentucky Utilities (LG&E and KU) had asked the Kentucky Public Service Commission (PSC) at the beginning of the year for permission to retire some of its coal-fired power plant units. The utility argued  the aging units would be uneconomical to maintain alongside the costs of installing technology to meet proposed federal emissions regulations. 

To replace the power capacity from the proposed coal-fired power retirements, LG&E and KU was also seeking approval to invest billions of dollars in building two natural-gas fired power plants, while also coupling those plants with a newly built solar installation in Mercer County and entering into agreements to purchase solar power from other installations. 

In its 186-page Monday order, LG&E and KU ultimately received only some of what it wanted. 

The PSC allowed for two coal-fired power generation units at the utility’s Mill Creek Generating Station in Jefferson County to be retired but denied retirement requests for two other coal-fired units at other power plants. 

The commission stated in its order that because LG&E and KU could delay upgrades to meet future environmental regulations at some coal-fired units slated for retirement — specifically units at its E.W. Brown Generating Station in Mercer County and its Ghent Generating Station Carroll County — it was unnecessary to build one of the utility’s two  proposed new natural gas plants as a replacement for those retirements. 

The PSC subsequently denied proposed retirements of coal-fired units at the E.W. Brown and Ghent plants and denied permission to build one of two proposed natural gas plants, which would have been in Mercer County. 

LG&E and KU president John Crockett in a statement said the utility was “pleased” that the commission approved many parts of their proposed energy generation and energy efficiency plans. But he said he was concerned that the “deferral” of building one of two proposed natural gas plants could increase costs to customers. 

LG&E and KU plans to build the natural gas-fired plant that the PSC did approve, which has an approximate capacity of 640 megawatts, at its Mill Creek Generating Station in Jefferson County. 

“We put forth the least-cost plan to continue serving our customers in a safe and reliable manner,” Crockett said in his statement. 

The PSC also approved LG&E and KU’s request to build a 120-megawatt solar installation in Mercer County and enter into agreements to purchase power from other solar installations in excess of 600 megawatts. 

Andy McDonald, vice-chair of the solar energy advocacy group Kentucky Solar Energy Society, said the addition of solar into LG&E and KU’s portfolio represents “a very significant investment” into renewable energy but doesn’t preclude the need for more future renewable energy investments. LG&E and KU will still get the large majority of its power generation from burning fossil fuels even with the addition of the new renewable energy. 

McDonald pointed to a part of the PSC’s order that approved one of LG&E and KU’s smaller requests for a battery storage facility, something that renewable energy advocates say can be paired with solar installations to provide an around-the-clock, readily available power source. 

“I think the order reflects a recognition that the power supply mix is changing significantly,” McDonald said. “I think the order indicated an openness to those possibilities, but that doesn’t determine that any of that will happen.” 

McDonald also said he was disappointed the PSC approved one of two proposed natural gas plants, didn’t approve all coal-fired unit retirement requests and didn’t “embrace” renewable energy advocates’ calls for more investment into distributed energy resources, such as putting solar panels on rooftops of homes and businesses. 

The Kentucky Solar Energy Society was among several groups representing a range of interests — including Kentuckians for the Commonwealth and the Louisville-based Metropolitan Housing Coalition — that intervened in the PSC case. These groups argued against the construction of natural gas plants and advocated for an even greater expansion of renewable energy, citing the need for utilities like LG&E and KU to rapidly cut down on greenhouse gas emissions created by burning fossil fuels that contribute to climate change. 

Republican Kentucky Attorney General Daniel Cameron, also the Republican candidate for governor, slammed the PSC’s decision to allow some retirements of coal-fired units as “half measures” that “don’t cut it” for Kentuckians impacted by coal-fired power unit closures. 

“The fight to protect Kentucky coal continues. To those who have been victimized by the anti-coal agenda, I am more determined than ever to fight for you,” Cameron said. 

Cameron, along with the Kentucky Coal Association, opposed the coal-fired unit retirements proposed by LG&E and KU saying such closures would weaken Kentucky’s energy-cost competitiveness with other states. Generally, throughout the United States natural gas and renewable energy in recent years has outcompeted coal on cost-effectiveness as an energy source. 

Crockett, the LG&E and KU president, in a Lexington Herald-Leader column last week, pushed back on Republican-led arguments against retirement of coal-fired power plants saying “some of our oldest coal plants need to be retired.”

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Liam Niemeyer
Liam Niemeyer

Liam covers government and policy in Kentucky and its impacts throughout the Commonwealth for the Kentucky Lantern. He most recently spent four years reporting award-winning stories for WKMS Public Radio in Murray.