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After Years of Keeping Rates Low, Coal Now Detrimental to Utility Costs

By Jean-Pierre Daniel - Ligne à haute-tension 400.000 volts - Centrale de FessenheimCoal-fired electricity is one of the reasons Kentucky’s utility rates are among the lowest in the nation. And as new pollution regulations take effect, coal is the reason Kentucky will be among the hardest hit states. Rate increases currently before the Public Service Commission are one sign of the changing tide.

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Policy Presentation to Focus on Kentucky’s Energy Future

Kentucky gets most of its electricity from coal, but as new air pollution rules go into effect, coal becomes more expensive than it used to be. A presentation in Louisville tonight will discuss policies that can spur alternative, and cleaner, energy in the commonwealth.

Kristin Tracz is a research and policy associate with non-profit Mountain Area Community Economic Development. She says a smart economic move for Kentucky would be to pass the Clean Energy Opportunity Act—a bill that’s been introduced in the state legislature in the past two sessions.

The bill would set requirements for state utilities to get a certain percentage of their power from renewable sources. Tracz says this would help diversify the state’s energy mix, which would be a smart move as coal reserves decline and become more expensive to mine.

“We’re vulnerable with our portfolio being about 94 percent coal-fired currently,” she said. “As those costs go up, ratepayers in Kentucky, customers like you and I, will have a bigger price to pay for that coal.”

Tracz says there’s an unfounded skepticism around solar power in the commonwealth.

“You’ll hear folks say ‘Oh, that’ll never work in Kentucky’ or ‘It’s not sunny enough here,’” she said. “And if you look at the maps about solar access, the amount of sun that hits the ground in Kentucky is better than in New Jersey, and they’re one of the leading states in solar energy.”

And Tracz says other states with coal reserves—like Ohio—that have passed renewable portfolio standard bills have seen economic development in the solar sector.

Tracz’s talk is 6:00 tonight at the League of Women Voters’ Louisville headquarters at 115  S. Ewing Ave, Louisville.

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KY Forest Owners Receive Cash for Carbon Storage

Most of Kentucky’s thousands of acres of woodlands are owned privately.  And this week, some forest owners received sizable checks not for the timber they harvested, but for the carbon dioxide their trees stored and kept from forming global warming gases in the atmosphere.  Mountain Association for Community Economic Development program manager Scott Shouse (like “house”) says the checks came from the sale of carbon credits on an open market.  He says the program may not suit every forest owner.

“Timber is always going to be worth more per acre than carbon, absolutely without question. But a lot of people just don’t want to do a lot of more intensive management,” says Shouse.

So in those cases, Shouse says, selling carbon credits may be just enough to pay for property taxes, or the kind of less intensive management woods that aren’t harvested call for.

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Coal's Economics Could Face Challenges in KY, D.C.

Kentucky’s jobless rate is still at a troubling high, although the mining industry says it retained jobs over the past two months.  But the picture may be more complex for the industry.  Appalachian coal production has fallen over the decade.  And according to the Energy Information Administration, Kentucky coal is among the more expensive to buy.  Berea, Kentucky-based Mountain Association for Community Economic Development’s Justin Maxson says his organization found Kentucky may not be benefiting economically from coal as much as once thought.

“Our report looks at the competitiveness of eastern coal versus western coal.  And there are lots of reasons why eastern coal is just less competitive than it used to be.  And so the market share is growing smaller, which is part of this tough reality that the longer term economic future of coal is pretty bleak,” says Maxson.

Pending climate change legislation as well as changing mining regulations could also impact the industry.