By Senator Morgan McGarvey, Louisville, and Rep. Jeff Donohue, Louisville
Kentucky’s investor-owned electric utilities are seeking to restrict customers’ energy choices and to undercut ways to keep bills low.
The utilities want to prevent Kentucky families and small businesses from generating our own electricity, such as with cost-effective, energy-saving solar panels, as we saw this year with House Bill 227; but they also want to gut energy-efficiency programs, which are critical for many lower-income Kentuckians and our local small businesses.
It defies logic, but utilities contend that electricity is worth much more when they sell it than when their customers save it or generate it themselves.
LG&E and KU want to end more than a dozen energy-saving programs at the end of this year, and have asked the Kentucky Public Service Commission (PSC) to approve their plan.
The companies want to eliminate rebates for appliances and windows, refrigerator take-back programs, home energy audits and energy-efficiency education programs in schools.
Efficiency programs like these are critical, not only because they can directly save customers money on their monthly bills, but also because they reduce the overall energy demand that utilities have to meet. That has the benefit of reducing the need to build new power plants or run expensive plants at times of peak demand — which ultimately saves everyone even more money.
Shockingly, however, LG&E and KU assert that power customers save is worth zero cents, but every kilowatt they sell to retail customers is worth 19 cents per kilowatt.
LG&E and KU’s efficiency programs are also at risk because the PSC decided last year to gut nearly all of Kentucky Power Company’s (KPC) energy efficiency spending in the foreseeable future.
The PSC described this as necessary to address a spike in residential customers’ bills, yet it was undisputed that the efficiency surcharge was already set to plummet, without action by the PSC, even if all KPC’s energy efficiency programs fully continued as usual.
Unfortunately, the PSC wrongly blamed efficiency programs for the temporary bill spike that had arisen — a spike that was actually the result of KPC’s peculiar revenue collection method and was already set to end imminently.
In other words, customer bills were going to drop anyway, without the PSC ordering KPC to stop implementing nearly all efficiency programs. The PSC’s action was therefore unnecessary and misguided; it really only hurts the families and small businesses that had been depending on these important, collectively beneficial programs.
Energy efficiency reduces energy waste, saves customer money, and reduces air and water pollution. Just as customers urged Kentucky legislators to save rooftop solar, we must demand the PSC properly recognize the value of energy efficiency, and prevent LG&E and KU from gutting these popular, smart, cost-saving programs.
Sen. Morgan McGarvey is a Democrat representing Senate District 19. Rep. Jeffery Donohue is a Democrat representing House District 37.