KY ratepayers shouldn’t bear burden of hasty plan to build new power plants | Opinion

LG&E/KU have asked the Kentucky Public Service Commission to approve construction of two new natural gas power plants, a utility-scale battery, and upgrades to a coal plant, at a cost to ratepayers of $3.7 billion.

However, there’s a fly in the ointment. The utilities claim they need these new power plants to serve hoped-for new AI data centers, but there is no assurance they will ever materialize.

With or without these data centers, the huge price tag for these new power plants would fall to ratepayers and almost certainly result in future rate increases.

Instead of approving these new plants, the PSC should press for a more responsible energy strategy. The first priority should be greatly expanding the utilities’ energy efficiency programs, to reduce the need for new power plants while lowering customer bills. This is widely recognized as the lowest-cost way to meet growing energy demand. This should include supporting customer investments in rooftop solar, battery storage, and other technologies that can be managed as a “virtual power plant.”

Second, LG&E/KU should renew the multiple solar power agreements previously approved by the Commission, but which the utilities cancelled in the past year. Third, data centers’ rate structures should require these massive facilities to use on-site renewable energy, battery storage, and flexible load tariffs; requiring the data centers to ramp down demand at times of peak load, to protect regular customers from black-outs during heat waves.

LG&E/KU forecasts that data center development will increase their load by 1,750 megawatts by 2032, a 30% increase above current generation. By one estimate, this would consume as much energy as all LG&E/KU residential customers combined! And if these data centers don’t materialize, these new gas plants could become stranded assets. But customers would still be on the hook for the next 40 years, paying off massive investments no longer needed.

More importantly, these proposed fossil fuel plants ignore a fundamental challenge, the accelerating climate crisis and how to best transition to a more resilient and affordable energy system.

The Commission should consider this wider context and the risks that the climate crisis poses for the commonwealth. One way to do this would be for the PSC to open a case to investigate the multifaceted risks of climate change in the context of Kentucky’s power system and how that appraisal should shape future decision-making.

Such an investigation would finally acknowledge this overarching issue in making all decisions about energy production. Indeed, all government decisions at this point should ask, how does this decision affect our ability to cope with accelerating climate change?

In the present case, the Commission should protect ratepayers by sending the proposers back to the drawing board to develop plans to transition to a more resilient and efficient energy system. The PSC welcomes public comments prior to and/or at their public hearing August 4. Comments can be emailed to: psc.comment@ky.gov, case number 2025-00045.

In the risk of accelerating extreme weather, the younger you are the more you have at stake. But rest assured that for our children and grandchildren the stakes couldn’t be higher.

Henry Jackson is a retired LFUCG strategic planning manager and member of the Sierra Club Bluegrass Climate Action Team.

This story was originally published July 26, 2025 at 1:24 PM.