Louisville Gas & Electric and Kentucky Utilities are anticipating a huge increase in the amount of electricity they will need to produce over the next 15 years, in large part due to the possible data centers coming in to power AI. In a plan they submitted to the state’s Public Service Commission, they said they will soon be asking for approval to build (and charge customers for) new gas plants at a cost of $3.7 billion. But what happens to this investment if the data centers never get built? Or they are built with their own solar or other power sources? And what will be the impact on ratepayers?
Before LG&E-KU comes to the Public Service Commission asking to build gas plants that would be a 40-year investment for customers, we need:
- A commitment by LG&E-KU to examine and mitigate the impacts of their choices on their customers, especially low-income residential customers.
- A good faith effort from the utilities to evaluate the costs to meet the demand of new corporations with cheaper and more resilient options.
- A lot more certainty that data centers will actually be built and a promise that data center investors will be responsible for covering the costs of investments to serve them so that they don’t put the burden on ratepayers. Additionally, confirmation that LGE and KU can meet the carbon emissions standards that many of these corporations likely have.
- And more.
Interested in these issues? Read the below write-up for how you can get involved.
Energy utilities like Louisville Gas and Electric and Kentucky Utilities are regulated by the Kentucky Public Service Commission (PSC) to ensure safety, fairness, and reliability of services. Every three years, each electric utility must submit an Integrated Resource Plan to the PSC, outlining their strategy for meeting future energy demands over the next 15 years. Utilities can include plans for new power plants, renewable energy, and energy efficiency/demand reduction programs. LG&E and KU’s plan includes a lot of the first, less of the second, and very little of the last.
LG&E and KU filed their plan in October 2024, which includes strategies approved by the PSC in 2023, such as two coal retirements, a new natural gas plant, a battery storage project, energy efficiency programs, and two solar projects. However, it also stated that 637 megawatts of solar, approved in 2023, will not move forward. To put this in perspective — 637 megawatts of solar could serve the energy needs of approximately 70,000 homes!
To summarize the plan, LG&E and KU expect economic development to increase the demand for electricity by 30-45% by 2032, primarily driven by the possibility of new data centers coming to Kentucky. To meet this forecasted growth, LG&E and KU are proposing to spend $3.7 billion on additional gas plants, which could drive higher rates for the next 40 years, while investments in energy efficiency and local distributed energy resources – think rooftop solar and advanced batteries – would be cheaper and bring more benefits to customers. LG&E and KU’s IRP does not consider how these options can, just as well, meet the expected demand.
Report after report shows that renewables are cheaper than coal, and likely cheaper than natural gas, especially in the long run. Despite what you hear in the news, renewables can increase reliability and provide backup power during extreme weather, and distributed renewables and associated storage allow for microgrid developments and “virtual” power plants. With storage, they can also reduce peak load, which in turn reduces threats from events such as blackouts with Kentucky’s 2022 severe winter storm. Many states are already leading the way for how to transition to clean energy while ensuring reliability and affordability, and many companies are looking to locate in states whose utilities have power sources that meet their emissions standards.
With already high rates, additional rate increases could contribute to the affordable housing crisis and other cost of living issues many Kentuckians are already experiencing. High energy costs strain household budgets, reduce disposable income, and can put households at risk of being disconnected due to overdue bills.
Kentuckians for the Commonwealth, Kentucky Solar Energy Society, Metropolitan Housing Coalition, and the Mountain Association, represented by Kentucky Resources Council and Earthjustice, are jointly intervening on LG&E and KU’s Integrated Resource Plan on behalf of low-income families to ensure that rates remain affordable and promote reliable, safer energy sources. However, we need your help!
There is a public process for people to engage in PSC and utility decisions, but many people don’t know about the PSC, and they don’t know how to participate. Unfortunately, if the public doesn’t speak up, the PSC only hears the utility and business perspectives and can’t make the best decisions for everyday Kentuckians.
It is important that citizen voices, like yours, are heard. You can submit a public comment by simply emailing the PSC at psc.comment@ky.gov with your statement, your name, and case no. 2024-00326, or visit the Kentuckians for Energy Democracy website to file a public comment using their talking points.
A version of this op-ed was published in Kentucky papers in March 2025 written by Sarah Pierce of Metropolitan Housing Coalition with support from the intervening groups.
