Next up:
|
Integrated Resource Plan (IRP)What is an Integrated Resource Plan?The Integrated Resource Plan (IRP) is a blueprint for our electric utilities for the next 15 years. If taken seriously, it can help our utilities make smart decisions. Unfortunately, our electric utilities don't always consider what is most important to customers when making their plans. In LG&E and KU’s last Integrated Resource Plan, they completely ignored the process by developing an IRP that in no way matched the actual plan that they were using internally. They were reprimanded by the Public Service Commission for wasting our time reviewing a plan that they weren’t actually going to use.
This time, we believe that LG&E-KU have created an IRP that more closely matches what they are hoping to do over the next 15 years. However it appears that they have once again cherry-picked the outcomes they like, instead of allowing the models to represent the most realistic scenarios and choose the outcomes that are best for customers. They have shifted from disregarding reality to creating their own. There is far too much uncertainty right now to support LG&E-KU’s plan for the future and a blatant disregard for what will be the best, lowest-cost plan for customers in both the short- and long-term. |
Background Information: Case #2024-00326
- LG&E-KU is projecting a need for a lot more electricity in the next 15 years - a 30-45% increase from current load!
- The utilities expect that two previously approved coal retirements, a new 640 mega-watt (MW) Natural Gas Combined Cycle (NGCC) plant, a 125 MW Battery, DSM-Energy Efficiency Programs, and two 120 MW solar projects in Marion and Mercer Counties, will move forward.
- The IRP stated that 637 MW of previously approved solar (from Power Purchase Agreements), will not move forward.
- They want to build new gas plants, only add limited new large-scale solar, and have no serious consideration for distributed energy resources, like rooftop solar
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. In their IRP they mention they will soon be asking for approval to build (and charge us for) new gas plants. But what happens to this investment if the data centers never get built? And what will be the impact on ratepayers?
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.
More Information:
In 2024, 96 percent of new US power capacity installed was carbon-free, and only 4% was fossil gas. This is driven by economics, as solar PV and wind are now the cheapest electricity sources in most markets. So why are the companies moving in the opposite direction – and going against their own stated goals and their own policy principles by proposing more risky 40-year investments in natural gas generation?
We’ve already been down this road before, and we continue to pay a heavy price. Coal plants running at financial losses are costing US communities billions in health-related expenses. This dashboard estimates that Kentuckians have paid nearly $14 billion in health effects since 2015 alone – in addition to paying extra for coal plants that were not cost-effective! We should not make the same mistakes again.
There are better ways to meet our capacity needs, and they are cheaper than what the companies are proposing! Inclusive Utility Investments can lower costs and increase resiliency for participants and ratepayers alike. Virtual Power Plants are cheaper than new gas generation and bring more benefits home to our communities.
There’s no way to know exactly how much the companies’ energy loads will grow, but it’s important to make sure that customers are not on the hook for risky investments that don’t benefit them. And what is already abundantly clear is the fact that Kentuckians have been left behind by our utilities’ lack of investments in affordable energy efficiency and resiliency – and that our utilities have to start now and make huge strides to catch up. Kentuckians deserve no less.
We’ve already been down this road before, and we continue to pay a heavy price. Coal plants running at financial losses are costing US communities billions in health-related expenses. This dashboard estimates that Kentuckians have paid nearly $14 billion in health effects since 2015 alone – in addition to paying extra for coal plants that were not cost-effective! We should not make the same mistakes again.
There are better ways to meet our capacity needs, and they are cheaper than what the companies are proposing! Inclusive Utility Investments can lower costs and increase resiliency for participants and ratepayers alike. Virtual Power Plants are cheaper than new gas generation and bring more benefits home to our communities.
There’s no way to know exactly how much the companies’ energy loads will grow, but it’s important to make sure that customers are not on the hook for risky investments that don’t benefit them. And what is already abundantly clear is the fact that Kentuckians have been left behind by our utilities’ lack of investments in affordable energy efficiency and resiliency – and that our utilities have to start now and make huge strides to catch up. Kentuckians deserve no less.
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 your comment in your own words. You are welcome to use the talking points below but try not to copy and paste them word for word. The Commission gives more weight to unique comments over form responses. Don't overthink it. Your comment can be simple.
Please write your comment in your own words. You are welcome to use the talking points below but try not to copy and paste them word for word. The Commission gives more weight to unique comments over form responses. Don't overthink it. Your comment can be simple.
Sample Talking Points
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.
- We need utilities to stop investing our money in risky fossil fuel infrastructure that will end up becoming stranded assets as we move towards 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!
We need to see that our utilities are looking at how customers, especially low income customers are going to be impacted by their long term plan.
- Planning should be based on an understanding of the customers being served, not just general planning for the “average” customer. It is not okay for LG&E-KU to simply say that they haven’t looked into how low-income customers will be impacted by their plans.
- Include data on the income levels and energy burdens of customers, disconnection levels, and plan with this in mind.
- Include data on the housing types and conditions of customers being served.
- Recognize the economic development needs in the service territory.
- Include data on the income levels and energy burdens of customers, disconnection levels, and plan with this in mind.
- Stakeholders and the general public should be at the table during the planning process and given the tools and resources to engage meaningfully in shaping the plan.
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.
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.
- 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.
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.
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.