President’s Climate Strategy Means Kentucky Must Aggressively Address Options

By Len Peters, Secretary of the Kentucky Energy and Environment Cabinet

We have anticipated this day would come. And so, because we are such an energy intensive state with a lot of businesses reliant on low cost energy, the Kentucky Energy and Environment Cabinet has undertaken a study to provide an initial reading on how Green House Gas (GHG) regulations could affect the state. The study will explore possible generation technology changes, upgrades, possible GHG emission control technology and the possibility of integrating renewable energy into the state’s generation portfolio.

The ultimate goal is to define potential compliance strategies (including boiler efficiency improvements and carbon capture and storage technologies) that would minimize the economic impact of compliance. Manufacturing, which accounts for more than 200,000 jobs statewide and represents close to 20 percent of the state’s GDP, is extremely vulnerable to electricity price increases.

The imposition of GHG limits on existing plants will have significant, far reaching effects on states’ electric generation technology and fuel choices, the ultimate cost of electricity generation, and the retail price of electricity. And, since Kentucky is highly reliant on coal-fired generation for electricity production, the economy of the state will further erode. It is important to understand how GHG emission rules will affect the electric utilities because they represent the largest single stationary sources of emissions.

Kentucky’s per capita carbon footprint is 50 percent higher than the national average. We’ve recognized this as a vulnerability and have been putting into place programs and initiatives to help us reduce our overall greenhouse gas emissions in all sectors. From Governor Beshear’s comprehensive energy plan that called on a diversified energy portfolio, to our more recent Stimulating Energy Efficiency in Kentucky initiative—an overarching theme has been our obligation to address greenhouse gas emissions in a meaningful and affordable manner.

In addition to ongoing initiatives, we have several options that we as Kentuckians should be considering  going forward, to address not only the likely issues arising from Tuesday’s White House announcement, but opportunities which we have before us to help keep Kentucky moving forward. It’s important to keep Kentucky’s unique position in mind when discussing these options. It’s not always easy to convey the complexities of these issues, how they impact our businesses and citizens, and how options that work in other states might not be as applicable here.

Kentucky is unique, and when we talk about the ramifications of standards on existing plants it’s not because we are pro-coal or anti-environment, it’s because jobs and economic well-being are particularly vulnerable, and not every state is equally vulnerable. Our challenge to address GHG emissions is one we’ve been struggling with for years.