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The Kentucky Solar Energy Society's mission is to promote the use of renewable energy, energy efficiency, and conservation in Kentucky through education, advocacy, networking, and demonstration of practical applications.

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October 31, 2022

Kentucky Regulators Embrace Many Recommendations from Citizen’s Groups for Improving LG&E/KU’s Long-Term Planning

By Andy McDonald, Apogee-Climate & Energy Transitions

In September 2022 the Kentucky Public Service Commission (PSC) issued its Final Staff Report on the 2021 Integrated Resource Plan (IRP) from Louisville Gas & Electric/Kentucky Utilities Company (LG&E/KU). Kentucky’s regulated electric utilities are required to submit these long-term plans to the PSC every three years, to help ensure that they are adequately planning for their customers’ future needs. The Kentucky Solar Energy Society (KYSES) formally participated in the IRP process, along with Kentuckians for the Commonwealth, the Metro Housing Coalition, and the Mountain Association, who together were known as the Joint Intervenors and were represented by the Kentucky Resources Council and Earthjustice.

The PSC Staff Report reflected many of the concerns shared by KYSES and the Joint Intervenors, and placed the utilities on notice that they need to meet a higher standard in their planning process.

Key points from the PSC Staff Report include:

LG&E/KU produced an incomplete plan that failed to evaluate all reasonable resource options and overlooked many cost-effective strategies.
The IRP failed to examine continuation or expansion of LG&E/KU’s Demand-Side Management (DSM) and energy efficiency programs, which help customer’s save energy and lower their bills, despite their past success and proven track record.
The IRP was disconnected from the reality of LG&E/KU’s actual planning.

The utilities argued that the IRP process was only an exercise, but the PSC made clear that the IRP process should result in an actual plan they intend to implement.
This disconnect was made plain when it was revealed that LG&E/KU are preparing to seek permission to build new Natural Gas Combined Cycle (NGCC) Generators, even though their IRP described NGCC units as “not viable.”

LG&E/KU’s treatment of carbon risk was inconsistent.

LG&E/KU’s parent company, PPL, has a commitment to reduce carbon emissions 70% by 2035 and to be net-zero by 2050, yet LG&E/KU’s IRP projects the utilities continuing to be heavily dependent on coal and natural gas beyond 2060.
The PSC noted that this inconsistency indicates the failure of the IRP to address critical assumptions in the utilities’ planning, which could result in their customers being stuck with the costs.

There were many shortcomings in the utilities’ modeling process, reinforcing the comments presented by the Joint Intervenor’s expert witnesses from Energy Futures Group.

Additional concerns with the IRP identified by the Joint Intervenors:

The IRP did not address how the plan would specifically impact its low-income customers and vulnerable communities.

Energy costs place an especially high burden on low-income customers and electric utilities have an important role to play in reducing this burden, yet this issue was neglected in the IRP.

DSM and energy efficiency offer major opportunities to reduce the need for new power plants, while lowering customer bills, yet these resources were given minimal attention in the IRP.
With the passage of the Inflation Reduction Act, extensive new resources are now available to support utilities and their customers to invest in energy-saving measures in their homes and businesses. Although the IRP process has now closed, members of the Joint Intervenors are continuing to participate in LG&E/KU’s ongoing DSM Advisory Group, to help produce comprehensive and effective customer efficiency programs.
Pay As You Save (PAYS) programs are whole-house customer energy efficiency services, in which the utility invests in energy efficiency improvements in the customer’s home, with the investment being repaid through the customer’s monthly utility bill.

PAYS programs are an innovative way to reduce the barriers to energy efficiency, especially for lower-income customers and renters, and have been successfully implemented by many utilities around the country, including in Kentucky. The PSC has directed LG&E/KU to study offering a PAYS program for their customers, and the Joint Intervenors are advocating for this through the DSM Advisory Group.

LG&E/KU should begin to treat distributed energy resources (DER’s), such as solar net metering, as a resource on par with other traditional resource options.

The utilities’ IRP offered an analysis that showed that if net metering were allowed to grow unconstrained, customer-owned solar could provide over 500 Megawatts (MW) of power by 2030 (compared with less than 30 MW today). Despite the fact that all of this investment would come from the customers themselves, requiring no investment from the utilities, they did not evaluate DER’s as an actual resource in the mix that could help meet their customer’s future needs.
The IRP assumes that net metering will be capped at 1% of the utilities annual peak load, a constraint that would limit net metering’s growth to under 100 MW into the 2030’s. However, while Kentucky statute requires the utilities to offer net metering until it reaches 1% of their annual peak demand, it does not prohibit them from offering it beyond that point. If net metering is found to be a low-cost resource that benefits customers, LG&E/KU could continue offering it beyond the 1% threshold.

The PSC Staff Report represents a notable change in how the PSC reviews utility IRP’s, raising expectations that future IRP’s will be handled with much greater seriousness and transparency by the state’s regulated utilities.

KYSES and our allies will continue to push utilities to create long-term plans prioritizing a rapid shift to clean, renewable energy, distributed generation, affordable access, and the health of our communities in response to our changing climate. KYSES is presently engaged in multiple cases before the PSC, including LG&E/KU's application to build substantial new generation capacity along with new demand side management programs (Case # 2022-00402) and the East Kentucky Power Cooperative's (EKPC) IRP (Case # 2022-00098).

December 18, 2021

City of Frankfort Passes 100% Renewable Energy Resolution

At their October City Commission meeting, the City of Frankfort, Kentucky unanimously passed a 100% Renewable Energy Resolution. The Resolution calls for 100% clean renewable electricity for City government operations by 2023, 100% clean energy for City government by 2030, and 100% clean renewable electricity community-wide by 2030. The Resolution follows publication in March of a report by Apogee-Climate & Energy Transitions which detailed how Frankfort's local governments and public schools could meet 100% of their electricity needs with a 20 megawatt local solar facility, while reducing operational costs. Frankfort's 100% Renewables Resolution does not endorse any specific projects for achieving these goals, but establishes a clear direction and ambitious vision for Frankfort's energy future.

Click here to read the full text of Frankfort's 100% Renewable Energy Resolution.

November 15, 2021

RECORDING NOW AVAILABLE OF WEBINAR ON LG&E/KU NET METERING DECISION

On Thursday, October 28, 2021 KYSES hosted a webinar, Net Metering Update: Review of KY PSC Order Adopting New Net Metering Rates For LG&E and Kentucky Utilities Co. To read about the webinar and view the recording, review the Past Webinars on our Events Page.

October 12, 2021

Solar Net Metering Preserved by Public Service Commission for Customers of LG&E and KU

Recent Order Another Step In Years-Long Effort By Solar And Affordable Energy Advocates to Ensure Fair Valuation of Solar Energy in Kentucky

In an Order issued September 24th setting new net metering rates for LG&E and Kentucky Utilities Co., the Kentucky Public Service Commission (PSC) has again recognized the value of local, customer-owned renewable energy in Kentucky. The Order rejected LG&E and KU’s proposal to drastically reduce the value of solar energy exported back to the utility, which would have ended net metering and slashed the value of fed-back solar power by 75% to 2.3 cents/kWh. Instead, the Commission set the new compensation rate for net exported energy at 6.9 cents/kWh for LG&E and 7.4 cents/kWh for KU.

“This decision means solar continues to be accessible and economically attractive for small businesses, non-profits, and residential customers of LG&E and KU,” said Joshua Bills, a commercial energy specialist at the Mountain Association. “By recognizing the value that locally-owned solar has to the utility, the Commission has enabled Kentucky’s local solar businesses to continue to grow and serve our communities.”

This ruling builds on a previous decision issued in May 2021 in the Kentucky Power Co. rate case and reinforces the precedent set in that case. The Commission reaffirmed principles and best practices to be used by utilities for determining the value of distributed energy resources such as rooftop solar. The Commission identified multiple ways in which distributed solar resources help the utilities avoid costs and directed that these savings be credited to customers for the excess energy they supply to the grid.

In a statement following the Order, the Commission wrote, “LG&E/KU’s avoided cost calculations contain inconsistencies and in some instances are based on false or unreasonable assumptions. Their assumptions and process for estimating costs also failed to adhere to the guiding principles the Commission outlined in the Kentucky Power net metering Order.”

The Commission rejected the utilities’ claim that net metering customers provide no savings to the utility in the areas of generation, transmission, and distribution capacity, or by reducing carbon emissions.

The Kentucky Solar Energy Society participated in this case as one of four Joint Intervenors along with Kentuckians For The Commonwealth, the Metropolitan Housing Coalition, and the Mountain Association. They are represented by Tom FitzGerald, staff attorney for the Kentucky Resources Council, and received technical support from expert witnesses James Owen of Renew Missouri and Karl Rábago. The Kentucky Solar Energy Industries Association (KYSEIA) and Sierra Club also intervened in the case in support of fair net metering rates.

The testimony by the expert witnesses for the Joint Intervenors and KYSEIA played a critical role in preserving net metering for the customers of LG&E and KU. “This case shows the importance of allowing community stakeholders to fully participate in utility rate cases,” said Catherine Clement of Kentuckians For The Commonwealth. “The Joint Intervenors and KYSEIA’s witnesses provided substantive, detailed, well-researched testimony to the Commission, which helped produce an outcome which is fair, just and reasonable for all ratepayers, and will help the local solar industry to grow in Kentucky. We appreciate the Commission’s acknowledgment that our perspective helps to forge a better outcome for all.”

This Order established new net metering rates for all customers of LG&E or KU installing solar after September 24, 2021. For those net metering customers with solar PV systems already in operation prior to September 24^th, they have the right to continue operating under the original net metering rules for the next 25 years. Under original net metering, all energy exported to the grid is credited to the customer at the retail rate, currently about 10 cents/kWh for residential and 12 cents/kWh for small commercial customers.

Although the new net metering rates are about 25% lower than current retail rates, this reduced value only applies to net exports at the end of each monthly billing cycle. All solar energy produced and consumed on-site, within a billing period, is still fully credited against usage. The end result is that the changes adopted by the Commission will only reduce the value of a solar PV system by about 5% for future net metering customers who install enough solar to meet 100% of their annual needs. For customers with smaller solar generators, the impact on their savings will be even less.

“We commend the Commission for their diligence and performing a fair and comprehensive analysis of the net metering issue,” said Cathy Kuhn of the Metropolitan Housing Coalition. “While we believe greater value for avoided carbon emissions should be credited to net metering customers, overall, an honest, transparent, and reasoned process was used by the Commission and has produced fair, just and reasonable net metering rates.”

To read LG&E and KU's updated net metering tariffs and the Kentucky Public Service Commission's Interconnection Guidelines, visit https://lge-ku.com/residential/net-metering.

People across Kentucky are using solar energy to power their homes, reduce their energy bills, and protect the environment! Take a tour across the state and learn their Kentucky Solar Stories! Click here to start the tour!

June 8, 2021

KCC's Citizen's Resource Guide On Large Scale Merchant Solar is now available!