Whether we’re talking water, gas or electric, Kentucky’s public utilities are faced with the challenge of updating hundreds of miles of distribution systems that are in many cases decades old.
Here’s a look at Kentucky’s key public utilities players and how they are keeping pace with the market pressures of this capital-intensive business sector. We’re covering water, gas and electric providers, but as the Kentucky legislature continues to invest in internet delivery, we’re also taking a look at broadband.
Kentucky’s largest utility provider, Louisville Gas and Electric Co. and Kentucky Utilities Co. (LG&E and KU), supplies 1.3 million natural gas and electric customers in 93 of Kentucky’s 120 counties.
Continuing enhancements across operations at LG&E and KU electric transmission systems include replacing aging wooden poles with steel, installing new circuit breakers and substation equipment, managing vegetation and upgrading lines.
LG&E and KU use advanced technology that can pinpoint the location of power outages and, in many cases, limit the impacted area and automatically restore service for the surrounding customers.
“At our generation facilities, reliability at LG&E and KU’s power plants is among the best in the nation as a result of the utilities’ focus on carefully planned maintenance processes and prioritized investment in equipment critical to reliable generation,” said Natasha Collins, director of corporate communications for LG&E and KU. “The key reliability measure of unplanned equipment downtime has been reduced or improved by approximately 50% at the utilities’ power plants over the last decade.”
Across their natural gas system, LG&E continues to replace aging steel gas lines and make upgrades to compressor stations and underground storage facilities. And following comprehensive safety protocols, they are using in-line inspection tools, robotic sensors and leak detection surveys.
Like other utility providers in Kentucky and across the nation, LG&E and KU are feeling the public pressure for renewable energy as a replacement for legacy fossil fuel power that has steadily increased since the 1980s.
On the banks of Lake Herrington near Harrodsburg, the E.W. Brown Plant is unique in that it showcases four generations of electricity-producing facilities—a hydroelectric plant, a coal-fired generating unit, natural-gas fired combustion turbines and a universal solar facility.
At the universal solar facility, LG&E and KU are taking an innovative approach to vegetation management. Thanks to a partnership with nearby Shaker Village of Pleasant Hill, flocks of sheep freely roam and munch vegetation around the 44,000 solar panels.
This spring, public interest in the sheep and their role in the solar array prompted LG&E and KU to launch a live-streaming sheep cam where viewers can watch the “mowing.”
The variety of options LG&E and KU have created to meet renewable energy and sustainability goals includes a business solar program where customers can purchase solar, hydro or wind power with renewable energy certificates.
“Already, two of Kentucky’s leading industrial companies, Toyota and Dow, are participating in renewable power agreements that support the construction of a new, 100-megawatt solar array, which will be among the largest in Kentucky,” Collins said. “In addition, we’ll soon be doubling the size of our (business and residential) solar share facility in Simpsonville.”
A drop in Kentucky’s bucket
Kentucky is a state of rivers and streams. Unlike the vast expanse of Western states that are praying for the next rainfall or depending on snowmelt, Kentucky is blessed with an abundant water supply.
“The Ohio River is a great example, with 75 billion gallons of water flowing by every single day,” said Kelley Dearing Smith, vice president of communications and marketing for Louisville Water. “And yesterday at Louisville Water, we only pulled 140 million gallons of water to produce drinking water; it’s a drop in the bucket.”
Kentucky has done a good job over the past 30 years in consolidating water utilities, which has kept consumer costs down and improved water quality according to Smith.
“There were close to 1,000 water utilities in the state of Kentucky 30 years ago,” Smith said. “That’s crazy for a state our size, but today there are a few hundred.”
Louisville Water, which serves 850,000 residential and business customers in the greater Louisville area has been singled out by the Partnership for Safe Water, an EPA-driven program, as a utility that goes above and beyond in terms of delivering quality water. They are one of only 18 North American utilities with that distinction.
Louisville Water often finds itself playing a role in the regional economy, working closely with Louisville Forward and Greater Louisville Inc. to help market the state.
“Our abundant supply, outstanding quality and low rates make us a great fit for any business, but especially for food and beverage,” Smith said.
The recent announcement of House Food America’s new facility in Louisville is a case in point. The internationally known tofu-maker required two primary ingredients: soybeans and abundant quality water.
Louisville Water is employing robotic technology for monitoring their underground systems.
“Our robot device will go through a pipe while it’s filled with water, delivering it to customers’ homes,” Smith said. “Because of technology, we’ve been able to do more preventive maintenance, which means we’re not digging up streets or dealing with giant water-main breaks that disrupt life.”
Upcoming investments in technology over the next few years will improve the customer experience at Louisville Water, allowing customers to track their own daily usage and improve billing options.
“Today we’re trying to work with four or five different types of people, everything from the baby boomers to Gen Z,” Smith said. “Some want to talk to you on the phone, some just want to send an email, some never want to talk and want to have you on their mobile app and do everything they need on their smartphone.”
Kentucky American Water, a provider to 500,000 business and residential customers, will invest approximately $25 million in capital projects in 2021. Although 90% of their customer base is in Fayette County, the utility provides water and/or wastewater services in portions of 14 surrounding counties.
“We are currently working on projects such as upgrading aging water mains in some parts of our service area, as well as making water-treatment plant improvements,” said Susan Lancho, external affairs manager for Kentucky American Water.
“Water is essential, and it’s a life force,” said Lancho. “It flows through everything big and small, giving us what we need to drink, wash, work, cook, play, grow and so much more. It’s a vital part of nearly everything we do.”
Ongoing investment in water system infrastructure is critical to maintain quality, reliable service for communities, Lancho said.
“We are also concluding our first year of capital projects funded through our Qualified Infrastructure Program (QIP),” Lancho said. “The purpose of the QIP is to allow the company to replace aging water system infrastructure at a quicker pace before it potentially becomes problematic and more costly to replace.”
In June 2020, the Public Service Commission authorized Kentucky American Water to replace approximately six miles of water main projects along with main replacements associated with water main repairs. This represented $8.3 million in improvements by the end of June 2021.
“We have filed our recommendations for 2021-2022 QIP projects with the PSC, which are currently in review,” Lancho said. “The fee associated with the 2020-2021 QIP projects added approximately 36 cents to the average monthly residential water bill.”
East Kentucky Power Cooperative (EKPC) is a member-owned electric cooperative that provides wholesale electricity to 16 member-owned distribution cooperatives that serve 1.1 million Kentucky residents across 87 counties.
If you spot a TV or magazine advertisement for one the local EKPC cooperatives, they are often referred to as Kentucky’s Touchstone Energy Cooperatives.
EKPC provides power through coal-fueled plants located in Mason and Pulaski counties; natural gas-fueled plants in Clark and Oldham counties; and renewable energy plants in Barren, Boone, Clark, Laurel, Greenup, Hardin and Pendleton counties.
EKPC owns and maintains nearly 3,000 miles of high-voltage electric transmission lines and more than 275 substations. Much of this infrastructure was built decades ago. EKPC has established an assessment and screening process to identify and prioritize sections of transmission lines that will need to be replaced in coming years.
Major upgrades underway include a series of projects at EKPC’s power plant in Maysville aimed at ensuring future compliance with federal regulations related to handling and storage of coal ash and related materials, as well as handling and discharge of water at the plant that began in 2019 and will continue until 2024. These projects, totaling $263 million, will help to ensure the power plant remains in compliance with more stringent environmental rules.
Columbia Gas NiSource serves about 135,000 residential and commercial customers in 30 counties in Central and Eastern Kentucky.
Their multiyear pipeline replacement program remains a key focus of efforts to ensure safe and reliable service for customers.
They are working toward a goal of replacing aging cast-iron and bare steel pipe in their system with new pipe that has enhanced safety features and requires less future maintenance.
“We are investing about $45 million in projects in neighborhoods across our service area,” said Risa Richardson, communications manager at Columbia Gas of Kentucky. “Major projects this year include work in conjunction with the Clays Mill Road widening project in Lexington.
As with many utilities across Kentucky, the pandemic has brought an outpouring of relief and support programs for customers—an array of payment plans, waiving late fees and promoting federal and state payment-assistance programs.
Atmos Energy, which provides natural gas to 182,000 customers across western Kentucky, also makes community assistance a priority.
“Compassion to give back to communities we serve flows through the heart and soul of Atmos Energy’s employees, and our ‘Fueling Safe and Thriving Communities’ program focuses on three primary areas: students, community heroes and our most vulnerable neighbors,” said Kay Coomes, public affairs manager at Atmos Energy.
The Kentucky Communications Network Authority (KCNA) is the public technology authority that is partnering to build and manage a commonwealth-owned broadband fiber network across the state.
The promise of the project has wide-ranging benefits for improving the lives and lifestyle of Kentuckians, including economic development and tourism growth, higher education advances, interconnected public safety, and enhanced health care.
The construction of the high-speed fiber optic cable network is 98% complete and approximately 150 government-related offices have already migrated over to the Kentucky Wired network.
“By September we should be totally completed with Kentucky Wired, with off ramps into every county in Kentucky,” said Jamie Link, who was named executive director of KCNA in March 2020 and was recently appointed as secretary of the Kentucky Labor Cabinet. “One of the things that needs some clarity is that the Kentucky Wired Network is what we call a middle mile. If you use an analogy like the roadway system, Kentucky Wired is the interstate highway.”
To provide those last miles of connectivity from the nearly completed Kentucky Wired backbone to broadband customers, KCNA is relying on Accelecom, their exclusive wholesale partner.
The statewide network connecting all 120 counties is a 100G symmetrical geo-redundant fiber network according to David Flessas, CEO of Accelecom.
“It’s 3,200 miles of cable extending into each Kentucky county,” Flessas said. “The cable consists of 288 strands, with 144 strands designated for use by state agencies. The remaining capacity of the cable is available through Accelecom for commercial access for business, industry, health care and other Kentucky enterprises. ISPs can also utilize the network to extend service into underserved areas.”
The broadband network will have the most impact on rural areas where providers like AT&T, Windstream and Charter Spectrum have seldom ventured.
“In the rural market, the economic model just didn’t work for them,” Link said. “So that’s where the governor and congressmen saw the need, and that was the motivation behind building the Kentucky Wired network.”
“The cost of building the network is somewhere in the neighborhood of $360 million,” Link said. “The goal is that KCNA will be the service provider to all state government agencies and that is expected to generate about $12 million a year in service revenue that was previously going to private-party providers. One of the key elements of our wholesale agreement with Accelecom is that 75% plus of their net revenue comes back to the commonwealth. As those revenues continue to grow, the goal is that the project will be net positive in its ability to pay for itself.”
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Jeff McDanald is a correspondent for The Lane Report. He can be reached at [email protected]