A screenshot from the FPB's Dec. 28 board meeting.
After consecutive meetings on Monday and Tuesday, the Frankfort Plant Board and the Kentucky Municipal Energy Authority (KYMEA) voted on a new short-term energy plan that transitioned the group away from its original electricity contracts and entered it more into the Midcontinent Independent System Operator (MISO) market.
The plan came in part as a result of KYMEA’s Integrated Resource Planning (IRP) process as well as the contract that the agency currently has with the coal-fired Joppa Power Plant for 100 megawatts (MW) of electricity. That contract will expire at the end of May 2022.
“It’s a better portfolio compared to today,” FPB General Manager Gary Zheng said. “This is going to be better come summer 2022. We’re going to have 14% renewable, and the cost is lower.”
Zheng, a member of the KYMEA board, voted in favor of the plan at KYMEA’s board meeting on Tuesday; the FPB voted unanimously to approve it on Monday.
Zheng said that as a result of the choice, which was presented as "Plan E" to the FPB and KYMEA board and recommended by KYMEA staff, FPB ratepayers will see stable electricity rates while those who use Kentucky Utilities (KU) or Louisville Gas & Electric (LG&E) could see rate hikes.
FPB is an all-requirements member of KYMEA, meaning that it can't opt out of certain energy contracts pursued by KYMEA.
In the new short-term plan, the KYMEA board reduced its capacity commitment to the Paducah Power System (PPS) from 90MW to 60MW. It also had the option to up its commitment to the Ashwood Solar power plant, which Owensboro Municipal Utilities (OMU) opted out of, but did not do so.
Some of the measures adopted in the new short-term plan at least partially address concerns and desires by climate activist Andy McDonald and other Frankfort and Franklin County residents who frequently attend FPB meetings.
McDonald earlier proposed a resolution to the board that asked for some of what the short-term plan is providing: greater use of the MISO market, reduction of PPS and overall power supply reduction.
At the FPB meeting that preceded the KYMEA decision, in which Plan E was adopted unanimously with the exception of OMU’s abstention, KYMEA President and CEO Doug Buresh explained to FPB Chair John Cubine that in short this plan would mean a greater commitment to renewable energy, lower overall cost and slightly more market risk.
Buresh said that come summer 2022, KYMEA — and therefore the FPB — would go from 4% to 14% renewable energy.
Regarding renewable energy commitments, Buresh and members of the board pointed out that while KYMEA is refusing an extra commitment to Ashwood Solar, the door might not be shut on a greater commitment to it or other renewables in the future.
Buresh and board member Kathryn Dutton-Mitchell both noted that advances in renewable technology, particularly battery storage for solar energy, might allow greater investment in renewables in the future.
“We’re on the cusp of technology to improve access to battery storage,” Buresh said. “… And cost of batteries is going to get better and better each year.”
Cubine also asked for clarification from Buresh that in this short-term plan, KYMEA would not pursue building its own power plant. Buresh said the plan does not include that.
Buresh, in addressing another question from Dutton-Mitchell on being able to tweak the plan in the future, said that the board opted to retain flexibility in case it needs to react to changes in the market, technology or energy policy.
“One of the things about the planning process is the flexibility to pivot to different plans moving forward,” Buresh said. “… You don’t want to lock into too many things, but at the same time you leave too much at the table and you have regrets about not having a secure power supply. That’s the balance there.”
Frankfort Plant Board Chief Operating Officer Vent Foster said that while no power plan is perfect, he thinks the new short-term plan offered the most benefits.
“When you take into account market exposure, operating risk and the expected cost, I think this is a good happy medium that kind of balances all three of those,” Foster said.
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December 31, 2020 at 03:24AM
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