KU signs deal with cooperative to supply electricity to new Ford site

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Ford Motor Corp. and SK Innovation announced in September a $ 5.8 billion investment to build two electric battery manufacturing plants near Glendale, Ky. This is a representation of the BlueOvalSK Battery Park.

Ford Motor Corp.

Ahead of the big announcement on the Capitol Steps announcing the state’s largest private investment, $ 5.8 billion by Ford Motor Company and SK Innovations for Hardin County factories, two companies battled over who could call occupants its customers.

Kentucky Utilities (KU), the state’s largest electric utility, occupies about 20% of the electric service limit at the 1,551-acre site that will manufacture batteries for electric vehicles near Glendale. The much smaller, non-profit Nolin Rural Electric Cooperative (RECC) owns the remaining 1,200 acres according to maps provided by the Cabinet for Economic Development. Both Nolin and KU have said they should provide electric service to what could become one of the state’s largest electric utility loads.

KU won the argument.

The companies agreed to a settlement that would make the company, which, along with its sister company Louisville Gas & Electric, serves more than one million customers, the site’s sole electricity supplier according to a report. joint settlement agreement filed with the State Civil Service Commission (PSC).

Nolin RECC would get 800 acres of neighboring largely undeveloped land and a redacted sum of money from the deal in return if the PSC approves it.

The PSC is responsible for regulating state utilities and protecting their customers, and any changes to service territories require their approval.

It is not clear how this agreement was reached, although the territory of Nolin RECC currently occupies the vast majority of the site. The settlement suggests that part of the incentive for Nolin to cede his territory was “to avoid protracted and costly litigation” had prompted him to do so.

Tom FitzGerald of the Kentucky Resources Council said it’s unclear whether the deal is fair for Nolin without knowing how much money KU has given the co-op in return for the valuable service territory.

“Unless you are a party in this matter, you will not know it, and even then you will not be able to share this knowledge due to the request for confidentiality unless it is refused by the commission,” Fitzgerald said. “… It is impossible to look at what is publicly available and determine whether or not these customers are benefiting from this deal.” “

Why is this happening?

The governor’s office did not respond to questions about his involvement in the exchange, relying instead on a spokesperson for the Energy and Environment Cabinet who gave only a brief overview of the chronology of the case. He added that the two utilities have filed a petition for the PSC to approve the deal by February 1.

KU, for his part, said his existing relationship with Ford had played a role. Ford has a truck plant and assembly plant in Louisville, which are located within the service area of ​​its sister company Louisville Gas & Electric (LG&E).

“Given our current relationship with Ford as an LG&E customer, it made sense to expand that relationship to include Kentucky Utilities,” KU spokesperson Chris Whelan wrote in an email to the Herald-Leader. .

KU referred to the governor’s office and Ford on questions regarding Beshear’s involvement in the exchange and whether Ford had a preference for KU or Nolin.

A media representative for Ford North America has yet to respond to a request for comment.

Elizabethtown / Hardin County Industrial Foundation president and chief operating officer Rick Games did not comment on the deal, saying it was “above his salary.”

Neither Nolin RECC nor East Kentucky Power Cooperative (EKPC), of which it is a member, commented. EKPC is a non-profit organization owned by 16 small cooperatives like Nolin in the state. EKPC generates and transmits electricity to its owners / members, who in total distribute and supply electricity to 1.1 million people. It has access to the PJM Interconnection, one of the largest energy markets in the world. In one publicly available income report As of 2019, the Winchester-based company has achieved sales of over $ 887 million.

KU / LG & E, on the other hand, are for-profit and control the production, transmission and distribution of electricity. They are owned by Pennsylvania-based PPL Corp, a publicly traded company worth more than $ 22.7 billion.

According to Yahoo Finance, KU / LG&E serves just under one million electricity customers in Kentucky and 332,000 natural gas customers in the Louisville area.

The 16 members of EKPC cover a much larger territory than KU, but serve less dense and more difficult to reach places. Many of its cooperatives were formed under the Rural Electrification Act, a New Deal program that provided massive federal loans to such entities to power rural America.

EKPC was actively advertising the site on its own channels, creating a webpage featuring drone images, renderings and other information relating to the site on its dataispower.org. The company produced similar pages for other industrial sites across the state, including one in Hardin County.

The settlement agreement states that the estimated cost for the removal of EKPC and Nolin RECC facilities from the site, including a transmission line, is approximately $ 4 million.

One of the three PSC commissioners, Marianne Butler, did not participate in the discussions or deliberations on the case, according to the PSC documents. Butler is a former director of community initiatives at KU / LG&E and also served on the Louisville metropolitan council for 12 years.

Glendale sitemap
Above is a map detailing the boundaries of the Glendale Megasite. Kentucky Cabinet for Economic Development

Glendale Service Territory.
A map detailing the current electrical service territory for the Glendale site; current Kentucky Utilities territory is marked in yellow while the remainder is Nolin RECC territory. Kentucky Cabinet for Economic Development

PSC asks questions

In one “Data request” filed last week, the PSC requested information regarding the logistics of the service to the inbound twin battery factories and the impact of this service on taxpayers as well as data to support any projections made in the settlement agreement.

The PSC requests estimates of the cost of site service for KU and Nolin RECC.

He also asks for explanations, documents and studies that led them to determine the redacted settlement money that KU pays Nolin in exchange for the megasite land.

Responses to the PSC’s data request are expected Wednesday and were not submitted late Monday morning, according to the PSC.

Austin Horn is a political reporter for the Lexington Herald-Leader. He previously worked for the Frankfort State Journal and National Public Radio. Horn has roots in Woodford and Martin counties.

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