Louisville Gas & Electric and Kentucky Utilities have launched a formal feasibility study to evaluate small modular reactor deployment across their Kentucky service territory. The utilities, which serve 1.3 million customers and operate 7,700 MW of generating capacity, are examining SMR technology as baseload power replacement for aging coal units scheduled for retirement.

The study represents the first serious SMR evaluation by a major Southeastern utility with significant coal exposure. LG&E and KU currently derive approximately 70% of their generation from coal-fired plants, with several units facing closure under EPA regulations and economic pressure from natural gas and renewables. The utilities' parent company PPL Corporation has committed to net-zero emissions by 2050, making nuclear deployment critical for maintaining grid reliability while eliminating carbon emissions.

Kentucky's regulatory environment provides favorable conditions for nuclear development. The state legislature passed nuclear-friendly legislation in 2022, removing previous restrictions on new reactor construction and establishing streamlined permitting processes. Additionally, Kentucky's industrial electricity rates—among the lowest in the Southeast at 6.8 cents/kWh—create economic headroom for higher-cost FOAK nuclear deployment.

The feasibility study will evaluate multiple SMR technologies, site selection criteria, and integration with existing transmission infrastructure.

SMR Technology Options Under Review

LG&E and KU are conducting technology-agnostic evaluation of commercially viable SMR designs. NuScale Power's VOYGR platform leads the field with NRC design certification completed in January 2023 and first deployment at Idaho National Laboratory scheduled for 2029. The 77 MWe modules can be deployed in configurations from 154 MWe to 924 MWe, matching typical coal unit replacement requirements.

GE Vernova's BWRX-300 represents another leading candidate, with 300 MWe capacity per unit and simplified passive safety systems. The design recently received regulatory approval in Canada and entered NRC pre-application review for U.S. deployment. Westinghouse's AP300 SMR, scaled from the proven AP1000 design, offers 300 MWe capacity with extensive passive safety features.

The utilities are also examining advanced reactor concepts, including TerraPower's Natrium sodium-cooled fast reactor and X-energy's Xe-100 high-temperature gas reactor. However, these designs face longer development timelines and require HALEU fuel supply chains still under development.

Kentucky's Nuclear Infrastructure Advantages

Kentucky possesses several strategic advantages for SMR deployment that differentiate it from other Southeastern states. The state's uranium enrichment history—including the former Paducah Gaseous Diffusion Plant—provides existing nuclear workforce expertise and regulatory familiarity. Current Centrus Energy operations at the American Centrifuge Plant demonstrate active nuclear fuel cycle capabilities.

The utilities' transmission infrastructure connects directly to the Tennessee Valley Authority system and PJM Interconnection, providing market access for potential SMR capacity sales beyond Kentucky's borders. This multi-market exposure improves project economics by enabling merchant revenue opportunities alongside regulated utility contracts.

Kentucky's manufacturing base, including Toyota's Georgetown facility and numerous automotive suppliers, creates potential industrial customers for SMR-generated steam and process heat. Co-location opportunities could improve overall project LCOE through industrial heat sales and shared infrastructure costs.

Regulatory Timeline and Market Dynamics

The feasibility study will run through Q4 2026, with preliminary site selection and technology down-selection expected by year-end. If the study supports deployment, LG&E and KU would likely file a combined license application with the NRC in 2027-2028, targeting commercial operation in the early 2030s.

This timeline aligns with broader Southeastern utility nuclear planning. Southern Company's Vogtle Units 3 and 4 completion demonstrated regional nuclear construction capabilities, while Duke Energy's SMR evaluation for the Carolinas creates potential for coordinated deployment strategies. Tennessee Valley Authority's SMR program at Clinch River provides additional regional momentum.

Kentucky's regulated utility structure provides more straightforward cost recovery mechanisms compared to competitive markets. The Kentucky Public Service Commission has historically supported baseload generation investments, including recent natural gas plant approvals. However, SMR economics will face scrutiny given current wholesale power prices averaging $35-40/MWh in the Ohio Valley.

Key Takeaways

  • LG&E and KU serve 1.3 million customers with 70% coal generation requiring replacement
  • Kentucky removed nuclear construction restrictions in 2022, creating favorable regulatory environment
  • Multiple SMR technologies under evaluation, with NuScale VOYGR leading commercial readiness
  • State's uranium enrichment history provides existing nuclear workforce and infrastructure
  • Feasibility study completion targeted for Q4 2026, supporting early 2030s deployment
  • Project economics benefit from low current electricity rates and industrial co-location opportunities

Frequently Asked Questions

Which SMR technology is LG&E most likely to select? NuScale's VOYGR platform holds the strongest position due to completed NRC design certification and demonstrated commercial partnerships. However, the utilities are maintaining technology-neutral evaluation through 2026.

How much SMR capacity would replace LG&E's coal fleet? LG&E operates approximately 3,200 MW of coal capacity across multiple plants. SMR deployment would likely target 600-1,200 MW initially, replacing the oldest and least efficient coal units first.

What are the main economic challenges for Kentucky SMR deployment? FOAK SMR costs of $6,000-8,000/kW must compete with natural gas alternatives at $1,200-1,500/kW. However, carbon pricing expectations and fuel price volatility improve nuclear economics over 60-year plant lifespans.

How does Kentucky's regulatory environment compare to other Southeastern states? Kentucky's 2022 nuclear legislation removes previous construction restrictions and streamlines permitting. This positions the state more favorably than Georgia or North Carolina, where nuclear policy remains more restrictive.

When would the first Kentucky SMR begin commercial operation? Assuming positive feasibility study results and 2027 COL application filing, first commercial operation would likely occur in 2032-2034, depending on selected technology and NRC review timeline.