Partnerships and Power Sector Modernization

In 2016, the Kentucky Energy and Environment Cabinet (EEC) began a process for statewide discussions around power sector modernization by participating in a National Governors’ Association Policy Academy. The Policy Academy is an intensive year-long experience that provided EEC with the latest thinking on changing electricity grid systems. EEC used the insights and experience gained through the Academy to develop a Consumer Energy Management and Access Guide that describes different methods of procuring alternative energy in Kentucky as well as important energy management concepts.

The EEC’s efforts highlight the importance of ongoing discussions with stakeholders relating to understanding stakeholder concerns and needs, exploring the existing regulatory framework, as well as what policy options exist. It was important for EEC to explore ways for businesses in the state to meet their sustainable energy goals, attract new economic development projects all the while minimizing the cost impacts to other customers.

Since conclusion of the NGA Policy Academy in Kentucky, there has been a variety of independent activity spurred by Kentucky manufactures and electricity providers. Toyota announced the final steps of a partnership with solar developers to build a 700-acre solar farm in Eastern Kentucky. The farm, which has been in planning since 2017, will produce 100 MW of solar power and create 50 ongoing jobs and 200 construction jobs for local workers. The spirits producer Brown-Forman signed a virtual power purchase agreement in 2018 to procure out of state wind energy resources for its operations. These are just two examples of the trend occurring nationwide relating to corporate renewable energy buying trends.

In addition to manufacturers, two Kentucky electricity providers have announced Green Tariff Options. Utility green tariffs are optional programs offered by utilities and approved by state public utility commissions (PUCs) that allow larger commercial and industrial customers to buy bundled renewable electricity from a specific project through a special utility tariff rate. Kentucky Power offers a Renewable Power Option B Rider which allows customers to directly purchase the electrical output and all associated environmental attributes from a renewable energy generator through a bilateral contract with the Company. Louisville Gas and Electric Company and Kentucky Utilities’ Green Tariff option is pending via rate case 2018-00295 and 2018-00294. Kentucky joins 15 other states with Green Tariff options.

For more information on Kentucky’s Policy Academy experience, see the Final Report of Kentucky’s Participation in NGA Policy Academy of Power Sector Modernization.