Kentucky lawmakers introduced a bill Wednesday that would create a commission tasked with assessing power generation capacity and energy needs in the state, long known as a coal-producing powerhouse.
The commission’s role will include reviewing plans by Kentucky utilities to retire power plants, and its findings and recommendations will be submitted to regulators at the state Civil Service Commission. Coal-fired power plant closures are a troubling problem in Kentucky’s coalfields, leading to significant declines in coal-related jobs.
Supporters of the bill said the overarching goal is to ensure the Bluegrass State has an adequate supply of reliable energy sources to fuel economic growth. Business and conservation critics portrayed the bill as a potential barrier to replacing aging and inefficient coal-fired power plants.
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The bill, co-sponsored by top Senate leaders, had its first hearing Wednesday and passed the Senate Natural Resources and Energy Committee. The proposal will next go to the full Senate, but it still needs approval from the House. Republicans hold an overwhelming majority in both chambers.
“Senate Bill 349 ensures that existing generation capacity is not retired prematurely and that new or alternative generation is prepared to meet Kentucky’s energy needs,” said Republican Sen. Robbie Mills, the bill’s lead sponsor. “We are simply asking for due diligence and a thorough review to ensure that this is done.”
The bill also drew opposition from some major power company executives, who said it would further strengthen the bureaucracy that oversees an already highly regulated industry.
State Sen. Robbie Mills pictured at the Kentucky State Capitol on March 16, 2023 in Frankfort, Kentucky. Mills is the lead sponsor of a bill that would create a commission to evaluate Kentucky’s energy generation capabilities. (AP Photo/Timothy D. Easley, File)
Amy Spiller, president of Duke Energy’s Ohio and Kentucky power division, said: “This is an unnecessary review by a new government agency with many commissioners with existing biases.” This is a bill that will create a new law.” “The authority cannot meet its stated operational goals without jeopardizing reliability, affordability, and slowing Kentucky’s economic growth.”
This bill would create an Energy Planning and Inventory Commission. Most of its members will be appointed by the governor and confirmed by the Senate. The 18 members will include several people involved in the fossil fuel industry, but will also include a wide range of other people.
Its responsibilities include assessing the adequacy of the state’s generation capacity, projected future statewide electricity demand, and the energy grid’s ability to withstand natural disasters. It will also consider the economic impact on the region if the power plant were to close.
Under the bill, utilities would be required to notify the new commission’s five-member executive committee at least one year before filing an application to decommission a power plant with the PSC. The Executive Committee will consider the proposed decommissioning of the power plant and he will submit its findings to the PSC.
Unless a utility can demonstrate that a replacement generator is not needed to provide reliable service, it cannot begin decommissioning a plant until a replacement generator is constructed and operational.
The bill reflects a top priority of Republican Senate President Robert Stivers, who called for a closer look at the state’s future energy production capacity and consumer demand. “This is an attempt to really focus on energy, because that’s what creates and drives our economy,” he said.
Spiller agreed that a collaborative study of the state’s energy needs is needed, but said the group cannot be “artificially biased” toward one priority.
“We cannot simply suggest that we need to keep aging and obsolete units online to solve all future growth needs in the commonwealth,” she said.
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Stivers responded that this is not a “coal-focused issue.” He noted that the bill allows “all of the above approaches” to power generation, including coal, oil, natural gas, wind, solar, hydropower and nuclear power. The Senate recently passed a bill aimed at laying the groundwork for attracting nuclear power projects to Kentucky. This bill is pending in the House of Representatives.
“The reality is that we know there are potential alternative fuels,” Stivers said Wednesday. “And this is an attempt to create exactly what everyone is talking about: a research group from all areas of the energy community.”
Kentucky’s coal industry has declined significantly over the past two decades, with the state producing about a quarter of the coal it mined 20 years ago. But the state still generates about 68% of its electricity from coal, a number that is at historic lows as the power generation industry shuts down coal-fired power plants and switches to cheaper natural gas-fired generators. This has decreased from about 90%.
