Cities making smart choices about power

The municipal utilities in Kentucky Municipal Energy Agency welcome the Herald-Leader’s attention to their new power-supply arrangements, but wishes the editorial board had made the effort to reach a more fully informed position.

Apparently relying exclusively on a consulting firm’s report without checking its accuracy, the editorial failed to appreciate that the Frankfort Plant Board and other KyMEA members are making just the type of smart choices for affordable power, opportunities for innovation and reduced reliance on coal-fired power that the editorial encourages.

Contrary to EnvisionFranklinCounty and its consultants’ repeated claim that KyMEA’s portfolio “is made up of nearly 100-percent coal-fired resources,” only about one-third of the capacity resources for 2022-2029 are coal-fired, and there are no requirements for minimum amounts of coal-fired energy purchases.

By taking the initiative to end their purchase contracts with Kentucky Utilities in 2019, the KyMEA members not only will reduce the power costs for their communities, but will bring the discussion and decision-making on future power supply sources back to their individual communities.

The initial supply portfolio will greatly reduce their reliance on coal, increase their use of cleaner natural gas fired resources, and build a “welcome wagon” for renewable resources, energy efficiency and other programs that each community can decide upon.

Contrary to the consultants’ accusation of “implicit disincentives” that will deter local utilities from pursuing cost-saving conservation, energy efficiency, demand-side management and distributed renewable generation, Frankfort’s contract with KyMEA explicitly embraces those measures.

To be sure, KyMEA’s members decided that the new agency should not overpay for local renewable resources of one member and thereby cause the other members to have to subsidize that through higher rates to their customers.

Perhaps the editorial board should have investigated whether leadership of the “grassroots” group includes a solar developer with a vested financial interest in obtaining such overpayments. Nothing interferes with a community’s developing a renewables project, but any subsidies must come from within the community that makes that choice.

The municipal utilities understand how Big Rivers’ redaction of terms in its power-supply contract with KyMEA can create misunderstandings and suspicions. As for the suggested need for PSC oversight, Big Rivers has already filed that contract for review and received approval from the PSC, which can decide whether and when additional terms should be made public.

All of KyMEA’s and the plant board’s meetings are public, and both have welcomed the participation of representatives of EnvisionFranklinCounty during the more than 15 months of meetings in which the municipals’ power-supply plans have been discussed and developed.

Public policy can, and should, direct the decisions of the plant board. But that board also understands its fiduciary responsibility to represent all of its customer-owners, not just those with a particular special-interest viewpoint.

Kentucky Municipal Utilities Association encourages everyone to take a deeper look at the exciting and innovative results being achieved by KyMEA and its members by working together for the betterment of their communities and the commonwealth.

This story was originally published December 16, 2016 at 3:36 PM with the headline "Cities making smart choices about power."