Dive Brief:

• The Kentucky Public Service Commission unanimously approved the state's first utility-scale solar project, WKMS reports. Proposed by Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU), the 10 megawatt array will cost about $36 million. KU will own 61% and LG&E will own the other 39%.
• Because the project will be online before the end of December 2016, the utilities will be able to take advantage of the 30% federal investment tax credit and the recent significant drop in the installed price of solar to keep the new generation from affecting electricity rates. Both the Sierra Club and Kentucky Industrial Utility Customers supported the proposal.
• The utilities are building the project to better understand solar plant operations and how the absence of fuel costs allows solar to provide electricity generation at a fixed, long term price. The installation will also allow the utilities to see how solar might help the state meet Clean Power Plan-required emissions reductions.

Dive Insight:

KU and LG&E, subsidiaries of PPL Corp., initially asked regulators to approve the solar installation and a 670 megawatt natural gas facility. Then, nine municipalities that were KU customers said they would cancel power purchase agreements by 2018, reducing the utility’s load by 325 megawatts and eliminating the need for the new natural gas plant.

KU and LG&E continued to seek approval for the solar array as necessary reserves that could be added without incurring fossil fuel price volatility or building emissions-creating new generation.

The U.S. Army is this year finishing a 5 megawatt array at Fort Campbell that, because it is on federal property, did not require the Kentucky regulators’ approval. A 2 megawatt solar project is already online at Fort Knox.