How the Green Energy program works

The LG&E and KU Green Energy program is voluntary. By participating, you are taking action to expand the generation capacity of renewable power on the regional electric grid that serves Kentucky.


Detailed version of how it works

The Green Energy program will use your monetary contributions to purchase Renewable Energy Certificates (RECs) on your behalf. A REC represents the property rights to the environmental, social, and other non-power benefits of 1,000 kilowatt-hours (kWh) of renewable electricity. RECs purchased by the program will be sourced from Kentucky or any of its bordering states.

When renewable energy operators generate 1,000 kWh of electricity, they have the option to create a REC to be associated with that 1,000 kWh of production. The creation of this REC decouples the raw electricity from its associated environmental benefit, effectively separating the sale of the two attributes. This provides a multitude of benefits to both renewable energy operators and those who purchase RECs.

For renewable operators, the sale of RECs offers another revenue stream that helps recover the high up-front capital costs of building the renewable generator. More revenue per unit of generation increases the likelihood of reinvestment in their operations. This reinvestment expands the economic viability of both the renewable energy operator and the industry at large.

For REC buyers, the purchase ensures exclusive ownership of the environmental and social benefits of the underlying electricity. When the Green Energy program purchases RECs on your behalf, only you can claim their associated benefits. For the calendar year 2018, every $5 contribution to the Green Energy program purchased roughly 1.15 RECs or 1,150 kWh of renewable (“Green”) energy. So, if you participated in 2018, every $5 you contributed would have purchased the rights to the environmental and social benefits of 1,150 kWh of renewable electricity.

At whatever level you choose to participate, we ensure that for every kWh of Green Energy you purchase, the equivalent amount of renewable energy is being generated and delivered onto the electric grid serving Kentucky. At the end of every year the Green Energy program “retires” all RECs purchased in the prior year, ensuring they are not resold and that program participants are their only beneficiaries.

While the Green Energy program makes every effort to purchase RECs from renewable generators in Kentucky, we may also purchase RECs from any of Kentucky’s bordering states. This occurs when there is a significant difference in REC prices amongst Green-e certified generators in these states, when compared to REC prices from Green-e certified generators within Kentucky. Click here for more information about the resource type and location of RECs historically purchased by the program.