LG&E/KU Settlement Would Stick Kentuckians with Billions in Costs for Speculative Demand
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Media Contact: Emily Tolliver, emily@kyrc.org
FRANKFORT, KY – A proposed settlement agreement filed yesterday by Louisville Gas & Electric and Kentucky Utilities (LG&E/KU) with the Kentucky Public Service Commission would greenlight billions of dollars in fossil fuel infrastructure to serve speculative future data center developments. Public interest organizations strongly oppose the deal, citing major risks to ratepayers and long-term environmental consequences.
The agreement would allow LG&E/KU to construct two new natural gas plants, extend the life of a coal-fired unit previously slated for retirement, and abandon a planned utility-scale battery project, despite widespread public concern and a lack of demonstrated energy need.
“This settlement would saddle Kentuckians with costly, polluting infrastructure based on hypothetical future demand,” said Byron Gary, staff attorney at Kentucky Resources Council. Gary represents the Joint Intervenors in the case, public interest groups Kentuckians For The Commonwealth, Kentucky Solar Energy Society, Metropolitan Housing Coalition, and Mountain Association. “The proposal prioritizes corporate interests over affordability, public health, and climate action. We’re also disappointed to see our elected city governments declining to advocate for their climate commitments.”
“By all realistic measurements, the risk and cost of building new generation capacity based upon speculative need is not in the best interest of ratepayers, especially low- and fixed-income residents,” said Tony Curtis, Executive Director of the Metropolitan Housing Coalition. “The burden is being placed squarely on the backs of each of our families, friends, and neighbors; and the highest impact will be felt by the lowest income households struggling to afford utility and housing costs. On the contrary, it’s the data centers — if they ever get built — who should bear the risk. This proposal does nothing to drive down rates, stabilize rates, or commit to affordable, renewable energy generation. LG&E/KU has stated that without data center growth, there would be no need for the proposed new generation.”
The settlement was negotiated between LG&E/KU and several parties, including the Kentucky Industrial Utility Customers (KIUC), Kentucky Coal Association, Southern Renewable Energy Association, and the Kentucky Attorney General’s Office of Rate Intervention. The city governments of Louisville and Lexington agreed not to oppose the settlement.
Advocates say the deal not only burdens ratepayers with billions in unnecessary costs but also undermines cities’ own climate goals.
“The energy used to power buildings is the largest source of Lexington's greenhouse gas emissions and toxic air pollution,” said Catherine Clement, a Lexington resident and member of Kentuckians For The Commonwealth. “This settlement, which commits Lexington to decades more of expensive fossil-based electricity generation, and fails to reduce demand with cost-saving options such as intensified energy efficiency programs, represents an abandonment of Lexington's net zero commitment and the needs of Lexington rate payers for affordable energy.”
Critics also point to the utilities’ failure to seriously evaluate more affordable, community-based energy solutions.
“The utilities have failed to seriously consider the role local, distributed energy resources can play to meet their customer's energy needs,” said Andy McDonald, a Certified Energy Manager and board member of the Kentucky Solar Energy Society. “Resources like solar, battery storage, demand side management, and energy efficiency can get built faster and at a lower cost to ratepayers than the proposed gas plants. And as we can see in many other states, they can be built at a scale that meets our growing electricity needs.”
The case now moves toward a final decision from the Public Service Commission.
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ABOUT KENTUCKY RESOURCES COUNCIL
Kentucky Resources Council is a nonprofit environmental law and advocacy organization dedicated to protecting Kentucky’s natural resources and ensuring environmental justice for all. For over 40 years, KRC has provided legal assistance, policy advocacy, and community support to safeguard clean air, water, and land across the Commonwealth.
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The Kentucky Solar Energy Society promotes the use of renewable energy, energy efficiency, and conservation in Kentucky through education, advocacy, and the demonstration of practical applications.
ABOUT KENTUCKIANS FOR THE COMMONWEALTH
KFTC is a forty-one-year-old, multi-issue grassroots organization of Kentuckians inspired by a vision to work for a brighter future for all people, no matter our color, where we come from, or how much money we have. Together, KFTC members organize for a fair economy, a healthy environment, new safe energy, and an honest democracy.
ABOUT MOUNTAIN ASSOCIATION
Mountain Association works with people in Eastern Kentucky and Central Appalachia to create economic opportunity, strengthen democracy, and support the sustainable use of natural resources. MA’s energy programs work to strengthen the region’s residents, small businesses, local governments, communities, and non-profits by helping to reduce energy costs and consumption, increase energy security, and build resilience in the face of climate change.
The Kentucky Resources Council is a non-profit, 501(c)(3) organization dedicated to the conservation and prudent use of Kentucky’s natural resources. Since 1984, we have dedicated ourselves to protecting Kentucky’s land, air, water, and communities.