Coal interests vs. environmentalists: Bill on fossil fuel power plants advances

A bill adding hurdles for companies looking to close fossil fuel-fired power plants passed the Senate Monday with overwhelming support from Republican legislators.

Senate Bill 349 from Sen. Robby Mills, R-Henderson, would create an 18-member commission to review requests to close fossil fuel-fired power plants before the state’s Public Service Commission can approve or deny such a retirement.

The commission’s recommendations would not be binding, but they could extend the overall timeline between application and retirement of plants. It builds off of a bill passed last session that made it harder to retire coal-fired power plants.

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The Energy Planning and Inventory Commission also would study Kentucky’s overall energy needs. The bill creating it passed 28-9 in a mostly party line vote.

Proponents of the bill – its sponsor is from the Western Kentucky coalfields and has a powerful co-sponsor from Eastern Kentucky in Senate President Robert Stivers – say it is needed to ensure that Kentucky has an adequate amount of energy to meet the demands of an increasingly electrified economy.

They also mention avoidance of blackouts, some of which were experienced during Winter Storm Elliott in 2022, as a reason to pass the bill.

Senate Bill 349 has been decried by utility companies and some free-market advocates who say it will cause rate increases for customers. Joining them in opposition are environmentalist groups, who say the bill is designed to benefit coal producers and encourages reliance on a declining source of energy.

Louisville Gas & Electric/Kentucky Utilities President John Crockett was among those who testified against the bill in committee. He also was an opponent of previous legislation that made it harder to retire coal-fired power plants.

Coal has fallen from more than half of the nation’s utility-scale electricity generation at the turn of the century to 16.2% last year, according to the U.S. Energy Information Association. Meanwhile, natural gas, which is also a fossil fuel, and renewable energy have increased.

Coal power generation is declining in Kentucky, but it still made up a majority of all generation in the state in 2022, per U.S. Energy Information Association. That year, about 68% of Kentucky’s utility-scale electricity net generation was coal-fired.

That was the third-highest percentage of any state, trailing West Virginia and Wyoming.

Although bill sponsors have stressed the measure is not only about coal, Senate Bill 349 has major backers in the coal industry. Dependable Power First Kentucky, an arm of the coal industry-supporting group America’s Power, has been a strong public advocate for the bill.

Joe Craft, a billionaire Kentucky native and energy executive who’s made his fortune in the coal industry, sat on the board of America’s Power as of its last publicly available tax filing ending December 2022.

Craft and his wife, Kelly, a former ambassador to the United Nations who ran for governor last year, are two of the nation’s biggest donors to Republican candidates. Both are co-chairs of the national party’s effort to raise money for GOP nominee and former president Donald Trump.

Both Kelly and Joe Craft gave the maximum amount to Stivers’ re-election campaign late last year, totaling $4,200 of Stivers’ impressive $400,000-plus pre-election year account.

Craft’s company, Alliance Resource Partners, touts itself as the largest coal producer in the eastern United States.

Stivers said that Joe Craft was one of many individuals “involved and engaged in the discussions” around the bill, including representatives from utility companies, electric co-operatives, industrial electric consumers, the University of Kentucky, the gas industry and more.

The Kentucky Coal Association, which is led by an ex-official in Trump’s Department of the Interior, has been lobbying the legislature itself. It’s also contracted with McCarthy Strategic Solutions, one of the most influential lobbying groups in Frankfort, this session.

The commission would be administratively attached to the University of Kentucky Center for Applied Energy Research. Its 18-member body would be comprised of:

• Three people tied to the coal industry, including a coal producer, transporter and buyer/seller.

• Two from the oil and gas industry.

• One from an investor-owned utility.

• One from an electricity generation and transmission co-operative.

• Two from the nuclear power industry.

• One representing commercial and industrial electric consumers.

• One representing producers of renewable electricity.

• One nominated by the chief executive officer of the Kentucky Chamber of Commerce.

• One investment banker or utility financier.

• One representing residential electricity consumers.

• One representative each from the Energy and Environment Cabinet and the Cabinet for Economic Development.

• One non-voting member each from the House and Senate.

The board’s executive committee would consist of the director of the University of Kentucky Center of Applied Energy Research, two people appointed by the governor and subject to Senate confirmation with the qualifications of a CEO or a board member of a coal company and an electric utility, and two members of the commission appointed by the commission membership.

Mills said that the federal government is “intentionally sabotaging” the national grid by allowing “radical environmentalists” to steer energy policy. Senate Bill 349, he says, adds a buffer between state and national energy policy.

Mills added one key change between the initially proposed bill and the version changed via a floor amendment adopted Wednesday is that utilities aiming to retire a fossil fuel-fired power plant would need to notify the Energy Planning and Inventory Commission 180 days before filing a request to the Public Service Commission instead of 365.

Mills said he made the change in consultation with utility companies.

He mentioned the bill as related to Senate Bill 4 from last year, which created obstacles for utilities asking the Public Service Commission for permission to replace coal-fired power generation with new sources.

Stivers underscored his belief the bill is not “a coal bill,” pointing to the fact that the bill is aimed at analyzing Kentucky’s energy portfolio beyond just coal.

“I’ve been on the periphery, as some of us in this chamber have, of the coal industry for probably 30 years now,” Stivers said. “This bill was not, as some people have tried to portray it, a ‘coal bill.’

Most Democrats, with the exception of former coal miner and Eastern Kentucky native Sen. Robin Webb, D-Grayson, voted no.

“What they have told us is that our actions today will increase costs to ratepayers,” Sen. David Yates, D-Louisville, said. “.I’m a strong believer in a diverse portfolio of energy, but I do worry whenever we tip the scales too far.”

The bill drew some fire from the political right, too.

Andrew McNeil, a former member of GOP Gov. Matt Bevin’s cabinet who’s now president of the Kentucky Forum for Rights, Economics & Education, wrote straightforwardly in a Herald-Leader op-ed column the bill “is designed to serve the coal industry.”

He sympathized with defenders of coal but said that the “bureaucracy” of the new commission would lead to higher costs for ratepayers.

“A new state bureaucracy isn’t the answer to the attack on coal from Washington D.C., Kentucky’s attention should be focused on winning that battle in the courts. SB 349 does nothing to support that fight,” McNeill wrote.

“As much as I’d like to see coal prevail in the ideological war that’s been waged against it, moving forward with an orderly transition to natural gas for baseload power is in Kentucky’s best interest.”