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Utility case influencing the future of Kentucky electricity generation kicks off

Ryan Van Velzer | LPM

A utility case that will influence the future of Kentucky's energy portfolio began Tuesday. At its heart is whether Louisville Gas and Electric and Kentucky Utilities can retire several coal generators and replace them with a combination of natural gas and renewables.

LG&E/KU plan to retire nearly a third of their coal generation by 2028. They want to replace it with a combination of natural gas, solar and battery storage. At the end of the hearing, utility regulators at the Public Service Commission will decide how to implement a new law that makes it harder to retire coal-fired power plants.

Utility leaders say their proposal reduces emissions, bolsters their renewable energy portfolio and provides the affordable, reliable service they’re required to under state law. They would, however, still generate the majority of their power from fossil fuels.

Several people said, during the public comment period, they are worried about how the coal plant closures could affect the regional economy. Others who spoke up said they are concerned that utility regulators will allow LG&E to build two natural gas power plants, locking in decades of new carbon and methane emissions at a time when the world needs to end its reliance on fossil fuels to avoid the worst impacts of warming.

“The utilities industry would like us to believe that 40 more years of natural gas pollution will not increase the threats posed by climate change to the reliability of our energy grid,” said Maria Stark of Louisville on Tuesday. “We, as the customers, aren’t buying it.”

LG&E officials say the planned gas plants would produce 65% less carbon emissions than the coal-fired plants they plan to retire, but natural gas plants and pipelines are prone to leaking methane, another potent greenhouse gas that may be as bad for the climate as coal, according to a recent study.

There is scientific consensus that the fossil fuels humankind has burned for centuries are the primary driver of global warming. Scientists warn there is limited time to end our reliance on them and avoid the worst impacts of climate change.

Scale of construction

LG&E/KU’s proposals include building two 621-megawatt natural gas combined-cycle units at a total cost of more than $1.3 billion. One would be located at the E.W. Brown Generating Station in Mercer County and the other at the Mill Creek Generating Station in Jefferson County.

They would also build a 120-megawatt solar array in Mercer County, acquire another in Marion County and secure four power purchase agreements for additional solar generation in excess of 600 megawatts, according to a news release. The utility would also build a 125-megawatt battery storage facility and offer 14 new programs to improve customers’ energy efficiency, like home energy audits.

But on Tuesday, LG&E/KU President John Crockett said the utilities would still generate about 91% of their power from fossil fuels, which is at odds with the utilities’ goal of reaching net-zero carbon emissions by 2050.

“We would be the first to tell you that we and others in the industry still have to identify ways for that to come to pass into the future, technology and otherwise,” Crockett said.

Changing laws in a changing climate

This week’s case is about more than just LG&E/KU’s plans to build new power plants. It’s also the first time utility regulators will be interpreting a new law passed earlier this year.

That law makes it harder to retire coal-fired power plants by creating “presumption” against their retirement. Essentially it requires utilities to prove any retirements won’t compromise the reliability and resilience of the electricity grid.

It also includes some language that will make it difficult for utilities to replace coal power with renewables. Specifically, it says that any new generation must be “dispatchable” meaning that it can be turned on and off, like a light switch.

There’s debate about whether renewables like solar and wind count as “dispatchable.” Though they can’t be turned on and off like fossil fuel generation, they can be stored for later use using batteries, which can be turned on and off.

When PSC Chairman Kent Chandler asked whether LG&E/KU believes renewables are dispatchable, Crockett said they are not. Ultimately however, it will be up to the state’s three utility commissioners to decide.

The new law was sponsored by Republican Sen. Robby Mills of Henderson, who is now Attorney General Daniel Cameron’s running mate in the November election for governor.

The hearing could last until Friday, commissioners will have until November to make a decision.

Ryan Van Velzer is Louisville Public Media's Energy and Environment Reporter. Email Ryan at