Special Subcommittee on Energy


Minutes of the<MeetNo1> 5th Meeting

of the 2014 Interim


<MeetMDY1> October 17, 2014


Call to Order and Roll Call

The<MeetNo2> 5th meeting of the Special Subcommittee on Energy was held on<Day> Friday,<MeetMDY2> October 17, 2014, at<MeetTime> 9:30 AM, at the Russel Acton Folk Center, Berea. Senator Jared Carpenter, Chairman, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Jared Carpenter, Co-Chair; Senators Jimmy Higdon, Ray S. Jones II, Brandon Smith, and Katie Stine; Representatives Rocky Adkins, Dwight D. Butler, Tim Couch, Keith Hall, Sannie Overly, Tom Riner, John Short, and Brent Yonts.


Guests:  Berea Mayor Steven Connelly, Ed Fortner, Jr., Berea Municipal Utilities and Brian Kiser, Commonwealth Office of Broadband Outreach and Development.


LRC Staff:  D. Todd Littlefield, Janine Coy-Geeslin, and Susan Spoonamore, Committee Assistant.


Mayor Connelly welcomed the committee and gave an overview on the history of Berea. Berea College began providing water to the city in 1904 and electricity in 1917. In 2005, the city purchased the water and electric system from the college. The money generated from utilities is segregated from the general fund and used to pay bonded debt, make improvements to utility infrastructure, and keep rates low. The Berea Utility Advisory Board obtained a Department of Local Government energy efficiency and conservation block grant to fund phases I and II of the solar farm. The farm consists of 246 panels totaling 60 kw power. The utility customers lease the solar panels at a onetime cost of $750 for a 25 year term. Each lessee receives a credit every billing period for the wholesale value of the electricity generated by the panels. In July, the farm added 126 more panels. The farm has produced 103,780 kw hours of electric power creating $7,369 of credits for customers. Customers can donate their credits to a church or school in the service area. The solar panel farm is Berea’s way of being good stewards of the environment and good trustees of the local utility company.


Adding Solar to Utilities’ Power Resources

Mr. Ed Fortner, Jr., Director, Berea Municipal Utilities (BMU) stated that BMU is a water, sewer, and electric utility and member of the Kentucky Municipal Utilities Association (KMUA). The goal is to supply reliable electric service at reasonable rates. BMU purchases most of its power from Kentucky Utilities under a wholesale arrangement. There are nine municipals that have recently indicated that they will terminate their contracts to purchase wholesale power from Kentucky Utilities. The municipals are actively pursuing other power alternatives and would like for the General Assembly to consider enabling legislation allowing them to form a joint action group. The group could help the municipals overcome the hurdles of intergovernmental agreements, which can be cumbersome and difficult to work around. There are 47 KMUA members, and all support the proposed legislation.


Another big project is the Owsley Fork Dam upgrade. Due to development occurring below the dam it has been reclassified as a high hazard dam. Mr. Fortner said that BMU has found that the construction criteria are outdated and would like the General Assembly to consider new legislation that might be proposed.


In response to Chairman Carpenter, Mr. Fortner said the goals of using solar panels are to help customers save money and help the environment.


In response to Representative Rocky Adkins, Mr. Fortner said that Phases I and II of the solar panel installation began in 2011 and Phases III and IV were just completed. BMU went through local government for the federal block grant. He said that the cost for Phases I and II was approximately $125,000, and the cost for Phases III and IV was $80,000. Even though BMU purchases power from Kentucky Utilities, it cannot sell back excess generation to KU.


In response to Chairman Carpenter, Mr. Fortner said that Owsley Fork Lake holds approximately 650 million gallons of water. The new proposed construction on the dam involves raising the dam and capturing more water.


Broadband Speed and Access in Kentucky

Mr. Brian Kiser, Commonwealth Office of Broadband Outreach and Development, explained that the office is involved with broadband mapping of access and availability, broadband advocacy and advising in Frankfort, establishing state-wide broadband policy, and directing and facilitating access to broadband resources. Access, awareness, adoption, and affordability are struggles for broadband in Kentucky. People are not aware of the positive benefits of broadband, and affordability is a problem because of the high number of low income citizens. Kentucky has 18 urban counties and 102 rural counties. About 1.5 percent of the urban area is without access to broadband versus 23 percent of the rural population. The average broadband speed nationally is 10 Mbps while Kentucky’s average speed is 7.3 Mbps. Kentucky has limited high capacity fiber or copper. Louisville, the state’s largest city, lags behind.


In response to Representative Adkins, Mr. Kiser said that he has talked to representatives of Foothills about a fiber to the home project. There are pockets of fiber but it is very expensive to get a pipe in. He will also talk to Mountain Rural Telephone.


Mr. Kiser said that Kentucky’s access numbers have improved by four percent from 2010 through 2014, and the adoption rate has increased nine percent. As for affordability, an Mbps cost $5.48 in 2010 and costs $3.95 in 2014. Kentucky still ranks 39th in price. Current efforts include: The Commonwealth Healthcare Network Fund, Next Generation Kentucky Information Highway, eLearning and Internet Access Centers, FirstNet and Adoption Program for 13 east Kentucky counties.


In response to Chairman Carpenter, Mr. Kiser said the Next Generation Kentucky Information Highway will help improve internet speed. The timeline for the Next Generation is 18 to 24 months. His office is working with broadband companies to make policies that will allow for investments and incentives.


There being no further business, the meeting was adjourned.