FPB - April 20

A screenshot from Frankfort Plant Board's Tuesday, April 20 meeting.

A widely circulated plan to expand solar energy production in Franklin County drew significant criticism at the Frankfort Plant Board’s monthly meeting on Tuesday night, both from board members and a consulting firm hired by the utility.

Kansas city-based Burns & McDonnell came down hard on the proposal by Andy McDonald and former FPB Vice Chair Walt Baldwin asking the City of Frankfort, the Franklin County Fiscal Court, Frankfort Independent Schools and Franklin County Schools to cooperate on a 20 megawatt (MW) 150-acre solar project.

Craig Brown, a project manager in the financial analysis and rates group at Burns & McDonnell, gave a presentation on the firm’s findings.

“I hate sounding like the guy that comes out and kills solar,” Brown said. “... I am pro-solar. I just think it has to be done the right way and planned the right way.”

Brown indicated that the proposed solar farm was not “planned the right way,” due to questions surrounding its effect on utility rates, its legality, costs, logistics and more.

McDonald, in a brief response to the report on Tuesday, said that the Burns & McDonnell report raised “general concerns” but failed to refute anything in his and Baldwin’s proposal, namely the effect or lack thereof it would have on FPB customers’ electricity rates.

FPB paid Burns & McDonnell $22,500 to analyze the plan. 

The report ultimately recommended that FPB should not move forward with McDonald’s and Baldwin’s proposal — made under McDonald’s Apogee Climate & Energy Transitions banner — but instead consider developing a “strategic roadmap” to increase renewable energy sources with the Kentucky Municipal Energy Agency (KYMEA), which has a contract to provide all of FPB’s electricity. The consulting firm also recommended that FPB look into restructuring its rate design, which the report said was outdated.

Of concern to Brown and members of the board was an issue that McDonald and Baldwin have previously claimed could be avoided under their plan: raising customer rates as a result of the revenue that would be lost if the local governmental entities purchased their power from the new solar farm instead of FPB.

“FPB is a not-for-profit utility and the large discount proposed for the government agencies would be made up with higher rates for residents or reduced investment in reliability,” the Burns & McDonnell report concluded. 

The report states that rates would likely increase for residents and businesses.

“We heard general concerns about possible impacts to the FPB, but did not see any actual analysis that refutes the findings in our report,” McDonald said Tuesday night. “Contrary to the consultant's claims, there would be no need to raise rates for other customers if this solar project moved forward. We look forward to carefully reviewing the consultant’s report and providing a detailed response.”

The Burns & McDonnell report also stated that KYMEA had conducted its own analysis of the Apogee proposal and concluded that costs would increase for all member utilities as a result of its implementation. 

The State Journal reached out to KYMEA President and CEO Doug Buresh, who did not offer a response to the Burns & McDonnell report.

One emphasis repeated by multiple board members and Brown was that FPB, through KYMEA, will be investing in more solar energy when the Ashwood Solar Plant in Western Kentucky goes live in 2023. FPB is set to receive 54 MW of power from the Ashwood plant.

“The philosophy of wanting more solar is still intact with the Frankfort Plant Board, and we still have that possibility," Director Stephen Mason said. "It just wouldn’t be coming out of Frankfort; it would be coming from KYMEA."

Mason, who said that Ashwood’s activation would put the FPB’s energy portfolio at around 10% solar, also referred to a KYMEA analysis that he said indicated the loss in FPB’s revenue as a result of adoption of the proposal was steeper than Apogee projected — that figure is a loss of $800,000.

Director John Snyder also derided what he called Apogee’s “totally ignoring the idea of transmission and distribution” costs, saying that the proposal makes “no economic or business sense.”

He asked Brown what the extra cost would be for the project beyond its initially estimated $800,000 loss in revenue due to transmission or distribution of energy, to which Brown responded “hundreds of thousands” of dollars. It is unclear what exactly that cost is calculated to be, or if it would be annual or one-time.

“The Apogee report said that this is only going to cost the FPB $800,000,” Snyder said. “When you say this is going to cost FPB $800,000, it’s going to cost the ratepayers $800,000. We don’t get our money anywhere else."

Snyder also mentioned that the FPB is currently spending big on three major projects — the Tanglewood water reservoir replacement, Advanced Metering Infrastructure and fiber-to-the-home broadband internet — and questioned whether 150 acres for such a solar facility could be feasible given land scarcity and pricing concerns.

Further, Brown’s presentation broadly questioned the legality of such a facility and pointed out that the FPB would have to change its net metering policy to accommodate such a large local energy producer.

The report states that the proposed facility would be "over 600x the current size limit and over 14x the available capacity," per the FPB's existing net metering policy.

FPB Chair John Cubine asked Chief Finance Officer David Denton if the four government entities proposed to collaborate on the project would save as much as the Apogee report forecasted.

“We still have demand and transmission charges attributable to these four customers, and we have operating, maintenance, capital improvements, debt service; these four customers would be paying more than they do today if we put it all together,” Denton said. “Overall, the costs of service to these four customers would increase.”

Director Dawn Hale, like Mason, expressed a desire to explore other solar options instead of the one Apogee proposed.

“I would love to do solar, but it has to be where other ratepayers aren’t subsidizing it,” Hale said. “I think that Mr. Brown has given us some good information for us to consider in how we’d be able to do solar more equitably. I’d like to pursue that in the future, but right now I don’t think it’s possible for us to do this.”

Director Kathryn Dutton-Mitchell said that she wanted to see more discussion on increasing renewable energy options, but also echoed legal concerns about the size of the proposed facility, ultimately expressing doubt about the likelihood of implementing Apogee’s plan.

“We’ve had a little bit of time to digest this,” Dutton-Mitchell said. “I know people are going to be disappointed. We all would have loved for this to be as good as it sounded, but there are positives that come from this. Anything that gets us talking about renewable energy is a good thing …  . This has just told me that we need to keep pushing. I really like the next step proposed in the report that we need work on a strategic roadmap to increase renewable energy resources.”

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