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LG&E-KU Request $3.7 BILLION in new generation for unconfirmed data centers.This case is a Certificate of Public Necessity and Convenience (CPCN). That means the utilities are asking permission to build new gas infrastructure. The commission must evaluate whether or not this new infrastructure is actually needed. It is the first step in the utility being able to come back and ask us to pay for these projects in a future rate case. Investor-owned utilities like LG&E and KU are allowed to recuperate the cost of projects like this + earn a return for their shareholders. This is the main way that utility shareholders make a profit.
In 2023, LG&E and Kentucky Utilities went to the Public Service Commission and requested to build two new solar farms, create power purchase agreements for additional solar, retire two aging coal plants and build two new natural gas plants. The commission approved the solar, and power purchase agreements for solar, the coal retirements, and ruled that they only needed the power from one gas plant, not two. Now, two years later, LG&E-KU are back at the commission asking to build TONS of new fossil generation, all to meet the expected need of several proposed data centers. The problem is, these data centers are not confirmed and many proposed data centers will never actually get built. Also, they abandoned plans for the previously approved solar power purchase agreements. What’s unclear to us is who is on the line to pay for the billions of dollars in investments if the projects never pan out. And customers are definitely on the line to pay the health care costs and disaster related costs, associated with more fossil fuel emissions. Without the data centers, LG&E-KU are already set up to have excess power on the grid by 2039 with the new generation projects that were approved in 2023. |
We haven’t seen the newest rate increase proposal (expecting it at the end of May, stay tuned) but it will likely include money for grid upgrades and cost recovery for the approved 2023 projects. Now they want to start building $3.7 BILLION in new generation. These are projects that we just can’t afford.
Before LG&E-KU comes to the Public Service Commission asking to build expensive, risky gas plants that would be a 40 year investment for customers, we need;
Before LG&E-KU comes to the Public Service Commission asking to build expensive, risky gas plants that would be a 40 year investment for customers, we need;
- A good faith effort from the utilities to evaluate the costs to serve new load for multi-billion dollar corporations with cheaper, cleaner, and more resilient options for meeting future power needs that include better Demand-Side Management/Energy Efficiency programs, Virtual Power Plants, rooftop and community solar and batteries.
- A lot more certainty that data centers will actually be built and a promise that data center investors will be responsible for covering the costs of investments to serve them so that they don’t put the burden on ratepayers.
- A commitment on behalf of our utilities to examine and mitigate the impacts of their choices on their customers, especially low-income residential customers.
Background Information: Case #2025-00045
LG&E-KU are anticipating a huge increase in the amount of electricity they will need to produce over the next 15 years, in large part due to the possible buildout of “data centers” to power AI. But what happens to this investment if the data centers never get built? And what will be the impact on ratepayers?
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What’s in this proposal? TOTAL COST- $3.7 BILLION
What’s not in the proposal. Despite their prediction of unprecedented load growth, their proposal fails to include:
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Certificate of Public Convenience and Necessity (CPCN): Utilities that are regulated by the Public Service Commission are required to get permission to build new infrastructure (power plants, transmission grid updates, etc.) A Certificate of Public Convenience and Necessity (or CPCN) is the official label for legal authority to spend money on capital investments. The PSC reviews the proposed project and determines whether there is a need for the new infrastructure, whether it is in the public interest, and whether or not the utility can pass those costs on to customers. Investor-Owned Utilities (as opposed to cooperatives) are also able to earn a return on investment, which is one way that they make money for their shareholders 
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Tips for Writing Your Comment
The Commission wants to hear how the case will affect your life and your family. You don’t have to be an expert for your input to matter.
Please write a personalized comment in the space provided below (as opposed to copy and pasting). Sample talking points are provided at the bottom of the page.
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If you don't add a message, the email sent to the commission will be blank.
Sample Talking Points
Data Centers are going to continue to come up as a reason that utilities need to build new power plants. We need to make sure that customers are protected.
- There is too much uncertainty right now for utilities to be thinking about investments in new, risky, 40 year commitments to natural gas generation.
- Before utilities come and ask for these investments there needs to be more certainty about how many and what kind of data centers are coming; and certainty that new data centers are not going to have negative impacts on residential and small business customers.
- Before they ask for investments in new, expensive, risky gas generation we need to be sure that they are considering all of the other lower cost, safer, more reliable and resilient options like DSM, virtual power plants, distributed solar and batteries.
Future electricity needs should be met with solutions that prioritize the needs of customers. We need solutions that keep energy prices affordable, make our energy system more resilient and reliable, and lessen our need for expensive fossil fuel energy infrastructure. It’s time to move past business as usual and try something different.
Let’s be smart about planning for the future. We need utilities to look at low cost ways to lower their peak demand so that there is no need to build new fossil fuel plants.
- We need utilities to stop investing our money in risky fossil fuel infrastructure that will end up becoming stranded assets as we move toward truly sustainable options.
- We need utilities to invest in energy efficiency and Demand-Side Management tools that realize the full potential of reducing future energy needs. The most affordable energy is the electricity we never have to produce.
- We need utilities to acknowledge the full benefits of rooftop solar and other distributed resources to both customers and the utility company and to incentivize these programs through fair compensation and inclusive investment that gives people an opportunity to access these technologies.
- We need utilities to invest in the latest technologies, including Virtual Power Plants. Studies show that Virtual Power Plants (VPPs) are 40-60% cheaper than gas peaker plants, and deliver more benefits to ratepayers as well!
More Definitions:
Demand Side Management (DSM): is a strategy used by electric utilities to manage and control energy consumption by consumers. DSM programs can offer financial incentives, education, or pricing schemes to encourage consumers to reduce their energy demand, especially during peak hours. DSM programs can provide benefits such as lower utility bills, improved service quality, reduced environmental impacts, and increased grid reliability
Distributed Generation: energy sources that are not centrally located like a large power plant. Distributed generation includes things like rooftop solar and battery storage at our homes and businesses.
Energy efficiency: measures are programs, products, and tools that help us to lower our energy usage and our energy bills. This includes weatherization and upgrades to our homes and appliances/heating and cooling systems that reduce the amount of energy needed to keep our homes safe and comfortable.
Inclusive Utility Investments: Also sometimes called “on-bill financing” is a financing mechanism that can be offered by utility companies to pay the upfront costs of customers’ energy efficiency upgrades or solar installations and allow the customers to pay back the “loan” using a portion of their monthly savings. This is a great tool for allowing low- and moderate- income people access to tools that will help lower their bills while taking away the huge hurdle of upfront costs.
Virtual Power Plants: A new technology that allows utility companies to access and deploy a set of distributed energy resources (such as rooftop solar, home batteries, and smart appliances enrolled in demand-response programs) to work together to balance out the supply and demand for electricity on a large-scale.