The slogan “Coal Keeps the Lights On” remains largely true in the commonwealth, although the industry’s dominance over power generation is not what it once was.
In 2014, coal supplied about 97 percent of the state’s energy needs, according to Kentucky Coal Association President Tucker Davis. Since then, that rate has dropped to about 69 percent due to tighter environmental regulations on the mining and burning of coal and increased use of natural gas for power generation. Davis says diversification of energy sources will be important in the future, but he adds that for now, the state will continue to rely on coal.
“Kentucky coal is the backbone of all industry here in our commonwealth,” says Davis. “It’s the driver of good-paying jobs and every facet of our economy.”
Historically, Kentucky’s abundant coal reserves and robust mining industry helped keep electricity rates low in the state. Davis says in 2014, the commonwealth had the third lowest industrial rate in the nation and the eighth lowest residential rate. Since then, 11 of the state’s coal-fired power plants have shuttered as utilities switch to natural gas, which can be cheaper than coal and burn more cleanly. Davis says those closures have been accompanied by higher utility costs for consumers. He says now Kentucky is 17th in the nation for residential customers and 21st for industrial entities.
Kate Shanks, senior vice president of public affairs for the Kentucky Chamber of Commerce, says even with the increases, the state’s electric rates remain competitive for commercial customers. She says global factors influence energy prices here, such as the war in Ukraine, as well as domestic regulatory issues.
“You do have a marketplace that is heavily influenced by policy at the federal level,” says Shanks.
Even advocates for renewables acknowledge that coal will continue to drive Kentucky’s energy sector in the near term. But Randal Strobo, an environmental attorney in Louisville, says the state should invest more in greener energy sources like solar and wind power to prepare for the future.
“With all the benefits that renewable energy provides to the environment, to people’s health, it’s really a no-brainer to start bringing that more online,” says Strobo.
Coal Versus Natural Gas and Renewables
The state’s coal industry has been on the decline for decades. In 1980, about 45,000 Kentuckians worked in coal jobs. Today that number is closer to 5,000.
Still coal remains a potent force in Frankfort. Industry advocates lobbied the 2023 General Assembly for legislation to make it harder for utilities to retire coal-fired power plants. Under Senate Bill 4, utility companies would have to receive permission from the Kentucky Public Service Commission before closing a coal-powered generation station and prove the closure would not adversely impact electrical service in the state.
Opponents argued the legislation would lead to higher costs for utilities forced to maintain aging coal plants, which could lead to increased rates for consumers. They contend SB 4 will also limit investment in renewables.
Proponents of the legislation argued that coal-fired plants are more reliable and resilient sources of electricity. They blamed rolling blackouts among some utilities in the state during the frigid weather last December on too much reliance on natural gas and renewable sources, which they contend aren’t as reliable.
Strobo acknowledges that natural gas generating stations did encounter problems during the cold snap, but he says coal plants did as well. He says reliability is an issue for any energy source but adds that reliability among renewables is improving with new battery storage technology and updated transmission grids.
Carrie Ray, energy director of the Mountain Association, says the notion that renewables can’t be a reliable source of power is based on misperceptions and outdated information.
“There have been a number of recent studies from our national labs, from the Department of Energy, from major research universities that have shown that increasing proportions of renewables on the grid actually increased stability and reliability,” says Ray.
Despite growing interest in renewables, utilities around the state still get less than 1 percent of power generation from solar and wind. Hydroelectric power comprises 8 percent, while natural gas accounts for 23 percent, according to the latest Kentucky Energy Profile from the state Energy and Environment Cabinet.
State Sen. Danny Carroll (R-Paducah) acknowledges that renewables are good for the planet, but he says they simply can’t supply the state’s or the nation’s energy needs at this point.
“We’ve got to make sure that we don’t start having more brownouts and blackouts in the commonwealth because we don’t have enough baseload energy,” says Carroll. “The wind, solar, they cannot power this country. We’re moving way too fast for that.”
The Push for Nuclear Power in Kentucky
Carroll spearheaded the creation of a state nuclear development working group to explore a range of issues involved in bringing nuclear power generation to the commonwealth. That group includes lawmakers, state officials, and representatives from the utility industry.
“The purpose of this group is to plot a course, primarily focusing on the need for a nuclear commission within the commonwealth and how that would be established,” says Carroll. “We need to do this with some haste – we cannot fall behind because I assure you that other states are investing tens of millions of dollars in nuclear energy and wanting to bring reactors to their state.”
Carroll says nuclear power has evolved far beyond the days of Three Mile Island, the Pennsylvania nuclear plant that experienced a partial meltdown in one reactor in 1979. He says reactors today are smaller, safer, and generate less waste than earlier versions. He also says former coal-fired generating stations could be converted to nuclear. With the rise of electric vehicles, Carroll contends the United States will need to build 300 nuclear reactors by the year 2050 just to keep pace with domestic energy demands.
While she acknowledges that nuclear technology has gotten safer, Ray says there are cheaper solutions to energy needs that involve far less risk. One option, she says, is to promote energy conservation strategies like better insulation and energy-efficient lighting and appliances so that homes and businesses consume less power.
“We could take that money that we invest in nuclear and invest it in efficiency and renewables – technologies that we know work today,” says Ray.
Strobo applauds the efforts of legislators to “think outside the box” on energy issues, but he says nuclear reactor safety and disposal of radioactive waste remain significant concerns.
“Until we have really good solutions for that, I think we’re going to find that nuclear’s going to be hard to implement,” says Strobo. “The more we focus on nuclear, the less we’re going to focus on other things that are proven to be workable.”
Energy and Climate Change
Along with Kentucky’s continued reliance on coal comes the problem of greenhouse gases that contribute to climate change. Shanks says the Kentucky Chamber recognizes that global warming is real and that most of the problem results from combustion of fossil fuels. Even though the United States contributes about 14 percent of greenhouse gasses globally, she says the nation is working to reduce those emissions. She says the trick is to transition to energy alternatives in ways that minimize expenses and disruptions.
“Because if we get it wrong and we go too fast or we go the wrong direction for too long, there are costs,” Shanks says. “We really to see that we have all those options on table, including renewables so that we can design the energy mix that fits our needs so that we can be the most affordable energy in the U.S. as well as the most reliable and resilient.”
Carroll says he doesn’t “buy into all the climate change,” arguing the research is contradictory. But he contends that people who are concerned about global warming should embrace nuclear power.
“It’s green,” says Carroll. “To fail to take it seriously and to fail to get ahead of the game on this would be a huge mistake for the commonwealth.”
Strobo says the United States historically has contributed far more greenhouse gas emissions than any other country. He says the global nature of the problem requires everyone to participate in the solution.
“The only way we’re going to really solve it is from bottom up and the top down,” says Strobo. “We need all hands on deck to do it, including our state government officials.”
Whatever policies Frankfort lawmakers may pursue, Ray says they must include a strong and responsive Public Service Commission, which regulates power, water, and telecommunications utilities in the state. She says the PSC should represent the needs of all Kentuckians and protect against unnecessary utility rate increases.
“The Public Service Commission has seen a continual erosion in their authority and their funding, which is really disheartening,” says Ray. “We need a robust and well-funded Public Service Commission to ensure that our utilities are acting in the best interests of every Kentuckian.”
