Franklin County could be getting a significant jolt of local solar energy — that is if plans presented by local energy advocates Andy McDonald and Walt Baldwin are adopted.
The ambitious 39-page plan proposes that the City of Frankfort, Franklin County Fiscal Court, Frankfort Independent Schools, and Franklin County Schools come together to cooperate on a 20 megawatt (MW), 150-acre solar project.
The plan’s implementation would be contingent on the Frankfort Plant Board’s approval. The proposed facility would be funded by a private developer with no cost to the local government entities; McDonald and Baldwin estimated that the project would save the organizations a collective $1.2 million annually but cost FPB $800,000 in revenue reductions.
McDonald and Baldwin, presenting under McDonald’s Apogee Climate & Energy Transitions banner, argue that the project would be worth it from an overall economic — as well as environmental and public relations — perspective.
The pair said that while they were aware of suitable sites as well as potential developers for the project, they did not have any in mind. McDonald also said that Earth Tools, the company for which he works, would not propose building such a facility and that neither he nor Baldwin would personally benefit from such a project.
They estimate that a developer would invest $25 million to $35 million in the project in order to provide power to all four public entities at a rate almost half that of FPB’s current retail rate. The developer then would enter an agreement with FPB to use virtual net metering to credit the entities’ accounts for their share of energy produced by the solar facility.
Unlike other solar projects across the state, the proposed development would be interconnected to FPB’s distribution system.
Baldwin previously served as vice-chair of FPB. He was not reappointed by former Mayor Bill May in 2019.
For perspective, the only similar solar facility sits atop Juniper Hill golf course’s pro shop and provides the shop with roughly a quarter of its power needs.
The proposed solar development would provide nearly 1,000 times that amount of power.
The benefits that McDonald and Baldwin touted for the local government entities are straightforward: they would get cheaper power while contributing to an environmentally friendly project that brings investment to Franklin County.
Under their estimated Purchase Power Agreement (PPA) rate, the four entities would save more than $25 million.
The duo’s pitch to the FPB is more complicated.
If their estimates hold, the FPB would take a revenue loss of $800,000. FPB’s fiscal year budget is just over $100 million.
McDonald described the $800,000 as something of an “insurance policy,” against upcoming changes in U.S. power policy that would skew the market more in favor of solar.
As of 2019, 2% of U.S. energy came from solar power while 11% came from renewable sources.
But McDonald and Baldwin say that will change.
They point to both an existing federal solar investment tax credit that the developer could take advantage of and a likelihood that President Joe Biden’s administration will enact more policies such as upping the social cost of carbon — which it already has done — that make such projects more economical.
“You have to take that broad look over the whole lifetime of the project, especially in light of pending carbon costs that are coming down the pipeline,” Baldwin said. “In light of that, the project would likely come out as the lowest cost option.”
They called the FPB’s potential loss an “insurance policy” against costs that could come down the pipeline
“That $800,000 is sort of an investment in a long term investment, an insurance policy in part, and also it stands in relation to the $1.2 million saved,” McDonald said. “I think it helps the community… . And in our research we looked at some of the plant board’s budget information. It’s a healthy, well-run organization and it has the means to make long term investments.”
The project would not violate policies of the Kentucky Municipal Energy Agency (KyMEA), Baldwin said. Baldwin was an opponent of KyMEA’s all requirements contract when he served as FPB Vice Chair.
McDonald, who has also at times been a vocal critic of KyMEA, said that the project would be made possible by the language in KyMEA’s agreement with FPB.
“That’s one of the virtues of KyMEA, really,” McDonald said. “It’s helping enable (net metering). Frankly, if they were still with KU (Kentucky Utilities) we wouldn’t be having this conversation.”
In the report, they wrote that the project could benefit KyYMEA as it considers potential new energy contracts.
“The KyMEA is currently evaluating their need for additional power supplies to replace 130 MW of coal and natural gas contracts due to expire or be reduced in 2022 and 2023,” they wrote. “Frankfort has a window of opportunity to reduce its demand for wholesale power and alleviate KyMEA’s need to replace these expiring contracts. By reducing their customer load, a 20 MW local solar project would help the FPB and KyMEA avoid the financial risks of committing to new coal or natural gas contracts.”
When asked about similar projects, the pair pointed to nearby metropolitan areas of Louisville and Cincinnati. Both of those cities have committed large sums of money to solar projects.
They argued that Frankfort, with its unique municipal utility setup, is positioned to commit to such a project.
“Frankfort is uniquely situated to benefit from a collaborative solar project because it owns a municipal utility which is not regulated by the Public Service Commission, has no investors to serve, and has the freedom to set local energy policies for the benefit of local residents,” they wrote.
FPB’s role, response
Thirty-three people attended a virtual event in which McDonald presented on the project. He and Baldwin took questions afterward.
Only two elected or appointed officials, Franklin County Magistrates Marti Booth and Michael Mueller, attended the event.
FPB spokesperson Cathy Lindsey did not offer comment on whether or not the utility supported the proposal. Lindsey said FPB would take the time to “dive into the numbers.”
“At this time, we feel it is premature to discuss the Apogee report we received last night until we have had time to study it more ourselves,” Lindsey wrote on Tuesday. “I’m sure this report took months to craft. We, too, will need some time to really take a deep dive into the numbers to determine how this project would affect all of our customers.”
In addressing FPB’s interest in solar energy, Lindsey pointed to KyMEA’s existing agreement to use energy from the forthcoming Ashwood Solar plant.
“We are very interested and supportive of solar opportunities,” Lindsey wrote. “That’s why we are excited that KyMEA has a 20-year PPA for 54 MW of solar generation which begins operation in late 2022.”
She indicated that an investigation into the pros and cons of the proposal would be forthcoming.
“It is important that we do not make any decisions that negatively impact some of our customers in order to benefit others. So, we look forward to digging in and learning more about the proposal and its possible benefits and other effects.”
KyMEA President and CEO Doug Buresh said that the agency was reviewing the proposal and had no comment as of Thursday afternoon.
FPB Chair John Cubine did not comment on the proposal, but said that the board would likely put discussion of it on its next meeting agenda. The next FPB meeting is scheduled for Tuesday, March 16.
The "next steps" outlined in the proposal are as follows:
- The City of Frankfort, Franklin County Fiscal Court, Franklin County Schools, and Frankfort Independent Schools would develop an agreement to cooperate on a Collaborative Solar Project.
- The FPB would approve a virtual net metering tariff for local governments and public schools.
- The city, county and public school districts would issue a Request for Proposals (RFP) for a Collaborative Solar Project.