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Ky. Senate bill would add more hurdles to utilities retiring fossil-fueled power plants

Mill Creek Generating Station in Louisville.
Ryan Van Velzer
Mill Creek Generating Station in Louisville.

In the wake of a new law that makes it harder to retire coal-fired power plants Republican Sen. Robby Mills from Henderson is back with a bill to create more restrictions on the retirement of fossil-fuel power plants — to the possible detriment of ratepayers.

The bill would create a new state commission stacked with representatives from fossil fuel industries to review proposed power plant retirements.

The so-called Energy Planning and Inventory Commission would then deliver detailed reports to state utility regulators at the Public Service Commission who make the final decision on a plant’s retirement.

Senate President Robert Stivers, the primary co-sponsor, said the bill is about collecting information for the state’s future energy needs.

“Nobody really understands the intricacies of energy generation and energy dispatch ability,” Stivers said. “This is an attempt to start putting in place a committee that would look at future years and estimate future year demands, and make sure that we stay reliable, cost efficient, competitive.”

The new commission would be appointed by the governor and confirmed by the Senate; it includes five representatives of fossil fuel industries, and one representative for “renewable electricity” producers. The group would also provide budget recommendations to the legislature and undertake various studies into the energy needs and production capabilities of the state.

Republicans including Stivers and Sen. Robby Mills of Henderson have for the last two years pushed legislation to protect the state’s aging coal-fired power plants from retirement. Restrictions passed into law last year created a “presumption” against the retirement of fossil fuel-generating units and require regulators to prove any retirements won’t compromise the reliability and resilience of the electric grid.

Their push comes as the planet’s leading climate scientists warn humankind is running out of time to end its reliance on fossil energy and avoid the worst impacts of warming. Coal, in particular, is among the first fossil fuels scientists recommend phasing out because of its warming potential and environmental harm, which accounts for widespread air and water pollution both in Kentucky and across the country.

Several Kentucky lawmakers remain concerned the energy transition is moving too fast, harming the state’s economy and potentially reducing the reliability of the electricity grid. Their new legislation goes even further in protecting the state’s remaining fossil-fueled power plants even as the state’s utilities actively lobby against the proposal.

Louisville Gas & Electric and Kentucky Utilities and Duke Energy said the legislation would create more unnecessary bureaucracy and continue to pressure utilities to keep old, inefficient power plants open.

“I agree with you that we need a study a comprehensive collaborative conversation … that cannot be artificially weighted toward one preference,” said Amy Spiller, the president of Duke Energy operations in Kentucky and Ohio. “We cannot simply suggest that an aging and antiquated unit must be kept online to solve all of the future growth needs in the Commonwealth.”

The measure also imposes new restrictions the Public Service Commission has to consider before it can allow a utility to retire its old plants. For example, a new power plant has to be in full operation before retirement and must have the “same or higher” electricity generating capacity, unless the utility can prove it unnecessary.

Tammy Wilson with the Northern Kentucky Chamber of Commerce said the bill creates “duplicative government oversight” and is weighted toward coal over more affordable options like natural gas. She also said many companies are looking for cleaner energies, which the bill doesn’t address.

In fact, the proposed legislation actively denies that retiring old fossil fuel-powered plants is “necessary for the protection of the environment or health, safety, and welfare” of Kentuckians and states that the health and happiness of Kentuckians is “promoted and protected” by the operation of those plants.

Sen. Brandon Smith of Hazard chairs the Senate Natural Resource and Energy committee. He said he doesn’t believe utilities when they argue switching away from aging coal facilities is actually a cost saver.

“I understand that you all have to dance to a federal mandate,” Smith said. “The federal government [is] weighing in and tipping the scales, and that's causing a problem.”

The federal government does provide tax credits for renewable energy production and various energy efficiency measures. Efficient natural gas plants also emit significantly less carbon dioxide compared with emissions from a typical new coal plant.

Utility regulators approved the retirement of two coal-fired generating units and deferred the retirement of two others late last year — they were the first retirements since the new regulations went into effect.

The new legislation also definitively states that, contrary to a decision from the utility regulatory commission, most renewable energies don’t count as dispatchable — meaning they likely couldn’t replace retired fossil fuel plants.

One of the more ambiguous terms in the new requirements is that any replacement power has to be “dispatchable,” which generally means a type of power generation that can be deployed immediately.

The Kentucky Coal Association argued that the term “dispatchable” often refers to fossil fuels that can be turned on and off when power is needed. Other groups said solar and wind can be dispatchable because utilities can buy electricity from wholesale energy markets, which often consists of renewable energy — that makes it dispatchable.

The Public Service Commission hasn't ruled definitively either way — although it said in a ruling that such energies are likely dispatchable — but the bill that passed committee Wednesday would answer that question. It expressly says dispatchable energy cannot be intermittent and includes any solar, wind, geothermal or short-duration energy storage.

Audrey Ernstberger, a lobbyist with the Kentucky Resource Council, an environmental justice nonprofit, testified that the legislation would make energy more expensive for ratepayers by excluding certain forms of power in favor of others.

“This bill is notably silent on the issue of affordability as it prioritizes reliable, resilient, dependable and abundant energy,” Ernstberger said. “But it specifically excludes renewable power from being considered as resource planning as replacements for the aging and uneconomic fossil fuel electricity plants.”

Ernstberger also expressed concern with another provision in the far-reaching energy bill that would impose a six-month deadline on all the Public Service Commission’s decisions. If they fail to meet that deadline, the requests are automatically granted, which could mean less oversight, she said.

Chair Smith said the bill’s sponsors are considering increasing the funding for the commission to meet the tight deadlines the proposal would establish.

State government and politics reporting is supported in part by the Corporation for Public Broadcasting.

Sylvia is the Capitol reporter for Kentucky Public Radio, a collaboration including Louisville Public Media, WEKU-Richmond, WKU Public Radio and WKMS-Murray. Email her at sgoodman@lpm.org.
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