1898 & Co. will determine best and most economical energy options for local utility
Henderson Municipal Power & Light General Manager Brad Bickett said the local utility is exploring the possibility of building and operating a natural gas generating plant.
That possibility, along with any other number of future energy solutions, are what firm 1898 & Co. has been tasked to investigate as it conducts an integrated resource plan for HMP&L, Bickett said. That work started last week, he said.
The IRP, on a general level, is a study of HMP&L’s needs for the next 20 years, and though the utility has asked 1898 & Co. to give special attention to the possibility of a natural gas plant, Bickett also said the firm will also explore other forms of energy, including solar, wind, battery storage, run-of-river hydro and nuclear.
Preliminary numbers show that a two-engine natural gas plant could produce 40% of HMP&L’s customers’ needs, said Bickett.
If the IRP—which is scheduled to be completed in March 2026—returns a recommendation for a natural gas plant and HMP&L decides to pursue that initiative, Bickett believes it could be built and operational by 2031, which is right at the end of one of HMP&L’s current contracts that supplies about 25% of its 110 megawatt capacity.
On Tuesday, HMP&L announced it had signed a contract with the Kentucky Municipal Power Association, which includes the Paducah Power system and the Princeton Electric Plant Board. The contract will run from 2027 through 2037. And once that begins, it will account for 30% of HMP&L’s energy needs, Bickett said.
“It’s a piece of our portfolio,” Bickett said.
HMP&L signs affordable contracts with suppliers years into the future in attempts to hedge the market, so that fluctuations on the market don’t negatively impact customers’ bills, Bickett said.
“We look far into the future when we’re planning power supply,” Bickett said.
When energy is dispatched to HMP&L every hour of every day, it is credited to HMP&L at the price it was bought for in earlier contracts, Bickett said.
So though HMP&L officials have asked 1898 & Co. to give attention to the natural gas plant, Bickett said the firm’s main task is to look at the financials and long-term scenarios of different options, which could include developments such as tougher EPA regulations on fossil fuels or the effect of ever-increasing numbers of data centers on energy needs.
Evaluating best-cost options, 1898 & Co. will provide suggestions once the IRP is complete.
HMP&L, however, is not obliged to pursue 1898 & Co.’s recommendations, Bickett said. For example, community concerns about a particular project could take it off the table, which was what occurred recently when HMP&L paused its work on a proposed battery energy storage system on South Green Street, he said.
And then the projected price of a natural gas plant—Bickett said $80 million—will weigh into what HMP&L ultimately decides to do.
Correction: The Hendersonian incorrectly stated HMP&L’s capacity needs as 110,000 megawatts. In fact, it is 110 MW. It has been corrected in this update.
