Kentucky Utilities and Louisville Gas and Electric Companies Seek Approval for Renewable Energy Contracts

Strategic Insights -

The Kentucky Public Service Commission is considering an application from Kentucky Utilities Company and Louisville Gas and Electric Company for approval of a 20-year solar power contract and two renewable power agreements to satisfy customer requests for a renewable energy source under Green Tariff Option 3. The companies propose to use existing accounting processes and a new Solar PPA Adjustment Clause to ensure all customers receive benefits from the solar power purchase agreement. This is a significant development for the state's renewable energy goals.

Key Takeaways:

  • The proposed solar power contract and renewable power agreements aim to satisfy customer requests for a renewable energy source under Green Tariff Option 3.
  • The companies' proposed approach uses existing After-the-Fact Billing (AFB) and Fuel Adjustment Clause (FAC) processes, deferral accounting, and a new Solar PPA Adjustment Clause to ensure all customers receive benefits from the solar power purchase agreement.
  • The Solar PPA Adjustment Clause is designed to ensure that all customers receive benefits without subsidizing the benefits received by Toyota Motor Manufacturing, Kentucky, Inc. and Dow Silicones Corporation.
  • The companies have previously testified in numerous proceedings before the Commission, including their 2018 base rate cases.
  • The joint testimony emphasized the importance of the relatively small size of the Solar PPA and its impact on the companies' customers and the Commonwealth.

Statistics:

  • The proposed solar power contract is for 20 years.
  • The renewable power agreements will be used to satisfy customer requests for a renewable energy source under Green Tariff Option 3.
  • The companies propose to use existing AFB and FAC processes, deferral accounting, and a new Solar PPA Adjustment Clause to ensure all customers receive benefits from the solar power purchase agreement.
  • The Solar PPA Adjustment Clause is designed to benefit all customers without subsidizing the benefits received by Toyota Motor Manufacturing, Kentucky, Inc. (Toyota) and Dow Silicones Corporation (Dow).

Sources:

  • In the Matter of: Electronic Joint Application of Louisville Gas and Electric Company and Kentucky Utilities Company for Approval of a Solar Power Contract and Two Renewable Power Agreements to Satisfy Customer Requests for a Renewable Energy Source under Green Tariff Option 3, Case No. 2020-00016
  • Joint Testimony of Lonnie E. Bellar, Chief Operating Officer, Christopher M. Garrett, Controller, and Robert M. Conroy, Vice President, State Regulation and Rates, Kentucky Utilities Company and Louisville Gas and Electric Company, filed September 18, 2020.