By John Cheves
March 16, 2023 - Kentucky lawmakers defensive about the decline of coal don’t want utility companies to retire old coal-fired power plants, even when that’s the best move economically and — in the face of climate change — environmentally.
On Wednesday, a House committee approved Senate Bill 4, which would create obstacles for utilities asking the Kentucky Public Service Commission for permission to replace coal-fired power generation with new sources, such as natural gas or renewable energy.
“There may be an instance where we have to pay a little bit more for reliability. But I think that might be very well spent to make sure that when our citizens flip that light switch, the lights turn on,” said state Rep. Jim Gooch, R-Providence, chairman of the House Natural Resources and Energy Committee.
The state’s largest utility, LG&E/Kentucky Utilities, filed a request in December to keep moving away from coal to other energy sources.
LG&E/KU told the PSC that it plans to build two natural gas plants and two solar power installations at several locations around Kentucky. At the same time, the company said it plans to retire three coal-fired plants by the year 2028 because of high maintenance costs or because they lack emissions reduction technology.
“For decades, coal-fired generation has served our customers well,” said John Crockett, president of LG&E/KU, in a statement last December.
“But many of our generating units are reaching the end of their economic life,” Crockett said. “It is no longer cost-effective to make the needed investments to meet increasingly stringent environmental regulations.”
The Kentucky Coal Association swiftly condemned the utility’s request, warning that a shift from coal to natural gas and solar could leave Kentucky without enough power. Blackouts could result at times of peak demand, it said.
“Have we not learned anything from the experience of Texas last winter and Europe today? Coal is reliable, plentiful, can be stockpiled for later use, and it is cheap,” the coal industry group said.
Supporting the coal industry, SB 4 would prohibit the PSC from approving requests to retire coal-fired power plants unless utilities can prove they could make the change without hurting the reliability or resilience of the electric grid or raising electric bills for ratepayers.
Utilities warn the bill’s regulatory filing requirements are structured in such a way as to make it difficult for them to retire coal-fired plants regardless of how inefficient and expensive they’ve become, potentially driving up both their costs and the financial burden passed along to ratepayers.
By the time a utility finally decides to retire a power plant, its experts have studied the numbers and determined that the most cost-effective, reliable option is shuttering that plant, Rocco D’Ascenzo, deputy general counsel for Duke Energy Kentucky, testified to a Senate committee last month.
“The decision whether or not to retire a power plant is not taken lightly by any prudent operator,” D’Ascenzo said.
“If this bill passes,” he said, “we would not be able to close a fossil fuel plant. That isn’t hyperbole. The bill would force our Northern Kentucky customers to continue to pay, into perpetuity, the incremental maintenance costs, as well as capital investments that we may have to make, for a plant that is no longer burning any fossil fuels and producing any energy.”
Business groups also are lobbying against the bill, worried about the bottom line.
“SB 4, in our view, will not improve our state’s energy security, reliability or resiliency. It is more likely to increase costs for manufacturers, other businesses and Kentucky consumers, while Kentucky’s competitive advantage of relatively low-cost energy is already being challenged aggressively by substantial changes in energy markets and production,” the Kentucky Association of Manufacturers told lawmakers in a March 12 letter.
However, the House committee overwhelmingly approved the bill on Wednesday and advanced it to the House floor. Several lawmakers said they wanted to declare themselves in favor of embattled fossil fuels and in opposition to federal environmental laws.
“We have no control over the federal side. But we’re taking a stance. At least we’re showing our side of it here in Kentucky,” state Rep. Tom Smith, R-Corbin, told his colleagues on the House committee. “Stand for our fossil. Stand for our production. I consider it an honor today to vote for this piece of legislation.”
Carbon dioxide, produced by the burning of coal and other fossil fuels, is the primary greenhouse gas contributing to climate change.
Global carbon emissions from burning coal grew by 1.6 percent in 2022, far exceeding the last decade’s average growth rate and reached a new high of almost 15.5 gigatonnes, according to the International Energy Agency. (One gigatonne is a billion tonnes, or roughly the same as 3 million Boeing 747 jets.)
Nationally, coal-fired power is on the decline.
As of 2021, power plant owners and operators reported plans to retire 28 percent, or 59 gigawatts, of the nation’s coal-fired power capacity by 2035, according to the U.S. Energy Information Administration.
At that time, the United States had 212 gigawatts of utility-scale, coal-fired, electric-generating capacity, most of it coming from plants built in the 1970s and 1980s. The average age of a plant was 45 years old. While coal-fired power plants do not have a fixed lifespan, utilities typically move to retire them once the rising costs to run them exceeds their expected future revenue, the EIA said.
In Kentucky, coal production and coal industry employment have dropped significantly over the last decade, according to state data.
But far more populous China and India have added a large number of new coal-fired power plants even as the United States has started to turn to other sources.