The Paducah Power System Board of Directors today approved a ten-year agreement with the Kentucky Municipal Energy Agency (KYMEA) for the purchase and sale of peaking capacity and energy from the PPS peaking plant. The contract begins May 1, 2019 and requires PPS to provide KYMEA 90 megawatts of capacity in the first three years of the deal and between 30 and 104 megawatts for the remainder of the contract. The PPS peaking plant is capable of producing 120 megawatts of power.
“This is an important milestone for us because it’s the first action that addresses our issue of excess capacity,” said Paducah Power General Manager Gary Zheng. “This is one of several deals we’ve been pursuing that we hope will significantly help to lower our power costs in coming years.” The contract is expected to generate approximately $4 million in additional revenue annually for PPS, starting in 2019.
PPS Board Chair Hardy Roberts said, “This is the culmination of many months of hard work and is an example of the type of deals we work on every day but can’t talk about publicly because of confidentiality agreements. Our goal is to build upon this success with other agreements that, combined, position us for long-term rate relief.”
KYMEA is finalizing several contracts in anticipation of supplying all or a portion of the power needs for several Kentucky cities, most of which are currently supplied by Kentucky Utilities under contracts that will end next spring.