The Owensboro Utility Commission approved a contract Thursday to purchase solar power to expanded OMU’s power supply portfolio. The contract includes buying 32 megawatts of solar power from Ashwood Solar I, LLC starting in late 2022.
OMU first began considering its future power supply in 2013, basing the final decision off the cost to OMU’s customers, reliability and the ability to provide stable rates. The Owensboro Utility Commission approved a contract on June 22 to purchase power from Big Rivers Electric Corporation (BREC). They also approved a recommendation to pursue the lowest-cost solar option provider, which was chosen through a bid with Kentucky Municipal Energy Agency (KyMEA).
Solar energy will provide about 5 percent of OMU’s needs. While the contract can be terminated if needed, OMU’s Interim General Manager Kevin Frizzell believes implementing solar energy will help stabilize costs for the municipal utility and benefit everyone.
Frizzell said solar power peaks at the same time it is most needed — during the summer months when customers are charged more on the electric portion of their OMU bill.
According to the OMU Integrated Resource Plan conducted last year, “Solar power provides an economically viable source of power and is a good fit for the utility’s overall portfolio.”
Frizzell said the price for the solar energy is fixed with no annual escalation, and it is favorable to OMU’s Power Purchase Agreement (PPA) with BREC.
Ashwood Solar I is jointly owned by MAP Energy and Open Road Renewables, who plan to build an 800-acre, 86-megawatt facility in Lyon County, Ky. The facility would be in the top 2 percent of the nation’s largest solar plants — almost 10 times larger than Kentucky’s biggest solar farm to date. It will include more than 300,000 solar panels capable of tracking the sun across the horizon, and will take nine to 12 months to construct.
The BREC contract will also result in the OMU Elmer Smith Generating Station ending all operations on June 1, 2020.
OMU’s two coal power production units are aging significantly, and lower power market prices added to the decision to shut down the Elmer Smith Generating Station. Owensboro Utility Commission Chair J.T. Fulkerson said ending operations at the station was the best option.
“OMU has owned and operated its own coal power production units since its inception over 100 years ago,” Fulkerson said. “Whereas this is a change both for the utility and our community, it is the most cost-effective option for our customer-owners. Throughout our analysis, it was very clear that continuing to own coal-powered facilities will continue to drive OMU’s rates up and is not in the best interest of OMU’s customer-owners.”
For Frizzell, this decision is “bittersweet,” as it means those at the Elmer Smith Generating Station will lose jobs. However, after years of analysis and economical cost benefits, the recommendation is a move Frizzell believes is best for the company and customers alike.
“We understand the gravity of the recommendation to change from self-generating to becoming a power purchaser,” Frizzell said. “But the action taken by our Commission fulfills OMU’s mission of providing reliable and quality service at the most economical cost.”