New Ky. law makes it more difficult to retire coal-fired power plants
Energy utilities now have to prove to regulators their plans to retire fossil-fueled power plants won’t compromise the reliability and resilience of the electric grid in Kentucky. It takes effect immediately.
The legislation emerged following a winter storm that wiped out electricity for around 1.6 million people in the days before Christmas.
It was the first time Louisville Gas & Electric and Kentucky Utilities has ever implemented forced outages, according to Chief Operating Officer Lonnie Bellar. The blackouts lasted for up to four hours and affected approximately 53,000 Louisville Gas and Electric and Kentucky Utilities ratepayers – or about 5%.
The rapid onset of freezing temperatures froze key components on a natural gas pipeline that supplies seven power plants in Kentucky. But it wasn’t just gas, an executive at Tennessee Valley Authority testified that TVA also lost about 2,600 megawatts of coal power.
Nonetheless, several state lawmakers blamed the outages on the retirement of coal power plants and the global transition to more sustainable energy sources. Chair of the House Natural Resources and Energy Committee Republican Rep. Jim Gooch, of Providence, told lawmakers he doesn’t believe affordable, reliable power is possible without coal.
“I mean it’s fantasy,” Gooch said at the hearing.
Following the hearing, Republican Sen. Robby Mills, of Henderson, sponsored Senate Bill 4, which requires electric utilities to prove their fossil-fuel retirement plans won’t compromise the reliability and resilience of the electric grid.
As a reason for the legislation, he cited a recent report from one of the nation’s largest grid operators that says the current pace of new power generation is insufficient to keep up with retirements and demand growth.
Energy utilities broadly opposed the law. They said it could force them to invest in outdated coal-fired power plants without consideration of the costs. One utility executive said it doesn’t make sense to invest hundreds of millions of dollars to continue operating a coal-fired power plant built in the 1970s.
It’s kind of like choosing between fixing up an old car or buying a new one, at some point the latter becomes a more prudent investment. Executives from LG&E and KU, and Duke Energy say the new law could result in higher electricity bills for ratepayers.
Utility regulators at the Public Service Commission declined to comment on the impacts of the new law.
In debate on the House floor, supporters blamed federal regulations for the decline of coal and the increased cost for electricity in their communities. Republican Rep. Ryan Dotson of Winchester said coal provided stability for his community, but that’s gone now and “people are depressed, drugs are rampant.”
The legislation passed last week. Gov. Andy Beshear had ten days to veto or sign the bill into law. Instead, his office chose to allow the measure to become law without his signature.
Beshear’s office did not immediately return a request for comment.