Sierra Club Case Drives KY Public Service Commission Investigation into Utility

In 2023, Sierra Club intervened in a proceeding regarding the future of Louisville Gas & Electric and Kentucky Utilities' (LG&E/KU) generation fleet. In that matter, we won the approved retirement of two coal plants and the addition of 877 MW of solar power (significant for Kentucky) and a 500 MWh battery. Further, Sierra Club uncovered significant coal plant failures during extreme winter weather and the utility's lack of transparency about those failures. As a result of the information we uncovered, the Kentucky Public Service Commission has opened an independent investigation into LG&E/KU's performance during and response to Winter Storm Elliott with the possibility of civil penalties. 

In the initial proceeding, the utility sought to retire four coal plants and build new solar and gas generation and battery storage. The Kentucky Coal Association, a powerful lobby in the state, also intervened and sought to keep the coal plants online. Legislators publicly pressured the Commission to keep all four plants online. Much of this pressure came from an argument that during Winter Storm Elliott, LG&E/KU had rolling blackouts due to the failure of a single gas pipeline operated by a third party—and that coal, by contrast, is 100% reliable. 

We were able to successfully debunk the myth that coal is fully reliable in winter weather, and demonstrate that LG&E/KU's coal plant failures during the winter storm were an independent cause of the blackouts. In discovery, we uncovered an internal LG&E/KU report that showed—when you added up the numbers—that coal failures during the storm were more than the amount of power that LG&E/KU lacked. Through cross-examination, we walked utility executives through those documents and got them to admit, under oath, that if the coal plants had not failed there would not have been blackouts. The Public Service Commission chair called our cross-examination "very helpful" for understanding "from a takeaway perspective" the issues during the storm. The info from the cross-examination also made news in Kentucky: articles here and here, and live tweets here. Our expert testified that coal plants are prone to outages in extreme weather and that LG&E/KU's approach of assuming that these aging plants are—unlike all other forms of generation—100% reliable is incorrect. The Commission cited the fact that coal plants are also prone to outages in ultimately determining that LG&E/KU could retire two coal plants.

Now, the Kentucky Public Service Commission has, on its own motion, opened an investigation into LG&E/KU over Winter Storm Elliott. Sierra Club raised really serious concerns at the hearing and in our post-hearing brief about LG&E/KU's failure to recognize coal plant failures or to anticipate that coal plants would be less than 100% reliable in winter weather in future, and about LG&E/KU's misleading presentation of data to the Commission. We were the only group to raise these concerns or the issue of coal failures in depth, so this is a victory. The order cites the prior case and incorporates by reference the entire record from the case into the new investigation. Here is an article on the Commission's order, noting Sierra Club's role and quoting us.

The PSC says the investigation will "determine the root cause(s) of LG&E/KU's inability to meet customer demand, the impact of the event on customers, the utilities' planning and reaction to the event and any changes LG&E/KU have made or plan to make" due to the failure. It will also determine whether the utilities, their officers, or their agents "were at fault or culpable" and, if so, whether that was willful. The PSC may order further action by LG&E/KU. We plan to intervene to emphasize coal plant failures and the need for LG&E/KU to (1) explore joining a regional organization to pool power resources across a broad geographic area and (2) diversify to include more renewable energy and storage--and not to prepare for extreme weather by building an island of fossil fuels.