While Louisville Gas & Electric was asking utility regulators permission to build a 12-mile-long natural gas pipeline through Bullitt County at ratepayers expense, internal utility records projected that nearly all of the additional gas would go to just one customer — Beam Suntory, the makers of Jim Beam Bourbon.
With the additional gas service, Beam Suntory would have become LG&E’s second-largest customer, after Ford, records show.
Utility regulators granted LG&E approval to build the pipeline in 2017. Since then, however, the project has stalled amid a slew of pending permit approvals and lawsuits.
The behind-the-scenes details arose during condemnation proceedings on Thursday as LG&E seeks the right to seize the remaining land from homeowners in Bullitt County that’s necessary to build the pipeline.
Attorney John Cox represents landowners who don’t want the pipeline to cross through their property. He says his clients should not have to turn over their land when the true purpose of the pipeline is to serve a single customer, Beam Suntory.
“Collusion is what we have here your honor. This pipeline was Jim Beam’s idea from jump. Jim Beam came to LG&E and said we need a pipeline, we need more gas,” Cox said.
LG&E says the current pipeline has run out of capacity and it needs to build a second pipeline to improve reliability and keep up with growth in the area around Mt. Washington, Shepherdsville, Clermont and Lebanon Junction.
The path of the pipeline would cut about three-quarters of a mile through the Bernheim Research Forest and Arboretum’s Cedar Grove wildlife corridor, which includes habitat for endangered species.
On Thursday, LG&E attorney Monica Braun said the utility has acquired the remaining lands necessary to build the pipeline, except for those owned by Bernheim and the four groups of owners whose property they’re asking a judge to allow them to seize.
The legal issue is whether LG&E has the right to seize land from the remaining landowners, and that hinges on whether or not the pipeline is really necessary, Braun said. LG&E’s attorneys say the pipeline is necessary to improve reliability for the 9,500 existing customers and increase capacity to meet future demand.
When it comes to capacity, Braun says LG&E has already denied service to 450 natural gas customers because the current line already reached its limits.
“And as there has been continued growth, LG&E has reached the point where it cannot push any additional gas through this line,” she said.
LG&E Meeting with Beam Suntory
Beam Suntory approached LG&E about an increased need for natural gas when the company began working on an expansion in 2015, according to a timeline assembled last June by Kevin Smith, vice president of public affairs for Beam Suntory.
LG&E Chief Operating Officer Lonnie Bellar testified Thursday that internal company projections from that time showed Jim Beam would receive 100% of the additional gas provided by the pipeline for the first two years.
“Jim Beam will, in that year, will almost be… represent all of the growth in the system if you isolate Jim Beam as a customer,” Bellar said during the hearing.
The forecast showed Beam Suntory would receive nearly all of the additional gas load for at least five years. Other records from the same set of internal documents demonstrated the pipeline would have increased Beam Suntory’s usage to such an extent that over five years, it would become LG&E’s second-largest customer behind Ford.
LG&E also appeared to share preliminary routes for the pipeline with representatives of Beam Suntory, according to emails shared during testimony. That’s even though the path of the pipeline was not shared with the public until 2019; LG&E asked utility regulators to shield the proposed route from public scrutiny because it would create a “competitive disadvantage,” according to a filing with utility regulators.
LG&E asked Beam Suntory to pay for a new pipeline at an estimated cost of $20-25 million, but the bourbon maker declined.
Tom Rieth, LG&E’s director of gas operations, testified Thursday it was around that time the utility learned about additional need for natural gas in the area because of potential growth. Between the need to increase reliability and build out capacity, LG&E decided to move forward with the pipeline project.