Energy-Efficiency Funds and Demand Response Programs, Kentucky

Updated June 2007

Some of the following documents are available as Adobe Acrobat PDFs. Download Adobe Reader.

What public-purpose-funded energy efficiency programs are available in my state?

Kentucky has no public-purpose-funded energy efficiency programs.

What utility energy efficiency programs are available to me?

Duke Energy offers the Energy Efficiency Incentive Program for rebates on high efficiency lighting, motors, pumps, air-conditioning units, and heat pumps. Incentives are prescriptive, based on the efficiency and capacity of equipment. Eligibility is limited to customers with a demand less than 500 kW. Incentives are capped at $50,000 per calendar year per facility for all eligible equipment.

What load management/demand response options are available to me?

Kentucky Utilities Company (KU) and Louisville Gas and Electric Company (LG&E) offer the Experimental Load Reduction Incentive Rider (PDF 928 KB, 118 pp), which provides participants with payments of up to $0.30/kWh for voluntarily operating standby generation at the request of the utility. To be eligible, the generator must have a capacity of at least 500 kW and be on an isolated circuit.

Duke Energy offers two load management programs that may be of interest to federal customers.

The Peak Load Management Program offers negotiated incentives for small- to mid-sized customers (< 500 kW) to reduce load during the utility's peak periods. Participants must reduce their demand down to a firm level upon being notified by the company.
The Real Time Pricing Program allows customers to save by shifting load away from peak periods when electricity is costliest.

Kentucky Power (a unit of AEP) offers both emergency and price curtailable service riders for large customers in Kentucky:

The Emergency Curtailable Service Rider provides credit ($0.35/kWh or $0.50/kWh, depending on whether the customer has committed to a maximum of four or eight hours of load reduction per call), based on curtailed energy use, to participants for reducing load when requested by the utility during emergency conditions in the winter (December through February) or summer (June through August). Even if the curtailment period is less, credit is guaranteed for at least two hours. Both winter and summer period total curtailments are capped at 50 hours.
The Price Curtailable Service Rider provides credit, based on curtailed energy use, to participants for reducing load when requested by the utility during high price periods. Participants specify the minimum price as well as the maximum number of days they would be willing to curtail. Payments are set at the greater of the participant's stated minimum price and 80% of the daily published price index for electricity into the system.

For both programs, customers must curtail a set amount upon notification or be assessed non-compliance penalties. Payments are based on the difference between the participant's peak demand and the highest 30-minute integrated demand during the curtailment period. Participation is limited to customers with a curtailable demand of at least 1 MW.

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers two demand response programs that may be attractive to federal customers in eastern Kentucky:

The Emergency Load Response Program provides participants with a payment representing the marginal cost of power at the nearest hub on the PJM system (the locational marginal price, or "LMP") or $0.50/kWh, whichever is greater, for providing load reductions when notified by PJM of a system emergency. Compliance with any load reduction request is voluntary; no penalties are assessed if a participant decides not to provide a load reduction. Retail electricity customers may participate through any PJM Member (for example, their electricity provider) or directly, by registering as a Special Member with PJM.
The Economic Load Response Program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. As with the PJM emergency program, participation is fully voluntary. Program participants have the choice of two options: the Day-Ahead or Real-Time Option. In the Day-Ahead Option, participants submit load reduction bids (of at least 100 kW) into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices. In the Real-Time Option, participants can decide at any time to provide load curtailments (with one hour notice to PJM), and receive payment based on the real-time electricity price. Retail electricity customers can participate in the program through any existing PJM Member, such as their utility, a third-party electricity supplier, or a specialty "curtailment service provider" (CSP). Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage.

In both of the emergency and economic programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy (DSIRE) provides information on programs that offer incentives for renewable distributed generation.

Through the Green Power Switch Generation Partners Program, TVA will purchase the output of a solar photovoltaic installation of up to 50 kW (though larger systems may be approved on a case-by-case basis) for ten years at $0.20/kWh. Purchases must be brokered by a participating power distributor (generally, utilities that purchase TVA power). Current (mid-2007) participants are Bowling Green Municipal Utilities, Franklin Electric Plant Board, Murray Electric System, Hopkinsville Electric System, Tri-County Electric, and the Pennyrile and Warren Rural Electric Cooperatives but interested customers of other TVA distribution utilities should contact their utility account representative to pursue this opportunity.

Are there energy efficiency programs sponsored by the state government?

For information on energy efficiency programs administered by the state government, contact the Kentucky Office of Energy Policy.

What additional opportunities are available to me?

Federal customers also have energy efficiency opportunities available with utilities that have area-wide contracts with GSA (such as Duke or LG&E) and, by extension, all other federal agencies. Federal facilities should contact their account executive to determine the level of participation by their local utility.