Alternative-energy requirement slows in state House
THE COURIER-JOURNAL - MARCH 11, 2010
By James Bruggers

Legislation that would force utilities to supply electricity that comes from renewable sources like wind and the sun is running into trouble in the Kentucky House — even after lawmakers added provisions to help new coal technologies.

The recently introduced House Bill 3 had been scheduled for a hearing and possible vote in the Natural Resources and Environment Committee Thursday, but it was pulled from the agenda at the last minute.

“It’s a work in progress,” said the committee’s chairman, Rep. Jim Gooch, D-Providence.

He said electric utilities are balking at being told what kind of electricity they may have to produce or purchase. Also, some lawmakers don’t want to force on consumers energy generated from renewable sources such as wind, solar, water and crops..

The bill, introduced by House Majority Floor Leader Rocky Adkins, D-Sandy Hook, would also give a boost to technologies such as coal-to-gas and injecting carbon dioxide from coal plants deep underground.

And utilities wouldn’t have to buy the renewable or alternative fuel electricity if it was more than 3 percent more expensive than buying it from conventional sources.

Gov. Steve Beshear backs the bill, saying it would save energy, boost renewable forms of energy while also supporting methods of using coal that cut down on its harmful emissions.

And after Thursday’s meeting, Kentucky Energy and Environment Secretary Len Peters said Beshear administration officials, lawmakers, industry representatives and others are trying to keep the bill alive as the General Assembly approaches its final two weeks.

Beshear singled out the bill’s importance to developing a biomass industry, which a state task force has concluded could scatter 10,000 new jobs across the state and bring in billions of dollars of revenue.
State officials envision using corn stalks, wood chips, new crops and other agricultural products to make liquid fuels or to burn them in power plants..

Officials with E.On, whose LG&E and Kentucky Utilities provide electricity to nearly 900,000 homes and businesses, declined to comment on the bill, citing ongoing discussions about it.

Bill Bissett, president of the Kentucky Coal Association, also declined comment. More than 90 percent of the state’s electricity comes from coal, and Kentucky is the third largest producer of coal.

Renewable energy standards have been adopted by as many as two dozen other states and typically focus on encouraging development of wind, solar and the like. At least four other states, including Illinois and Indiana, have some sort of policy to ensure a market for alternative coal technologies as a way to keep coal in the mix amid scientists’ growing concerns about climate change.

Adkins’ bill would create a market for both renewable and low-carbon electricity generators.It could also move the state closer to using nuclear power, which would likely qualify as a low-carbon source, but wouldn’t address what amounts to a moratorium on nuclear plants in the state.

Specifically, the bill would require utilities use renewable energy sources for 2 percent of all non-industrial electricity it sells by 2014, increasing to 10 percent by 2022.

Power generation, transmission or customer’s electricity use would need to become at least 12 percent more efficient by 2017, and reach a combined efficiency and low carbon benchmark of 14 percent by 2018, rising to 44 percent by 2024.

Some environmental advocates said they are skeptical of Adkins’ bill and prefer House Bill 408, sponsored by Rep. Harry Moberly, D-Richmond.

Moberly’s renewable energy bill does not exempt electricity sales to industry, which accounts for about half of all electricity sales in the state. That makes its benchmarks about twice as aggressive.

Moberly’s also does not have a provision to boost “low carbon resources” like cleaner coal. And it would establish a fund to help low-income people weatherize their homes.

“If the intent is to move in a direction of nuclear energy and a continued dependence on coal, they we really have to look at the downside of that,” said Jason Bailey, research and policy director for the Berea-based Mountain Association for Community Economic Development.

Capturing and storing carbon dioxide for new coal plants and nuclear energy will be too expensive, he said.

But other environmentalists said even Adkins’ bill would mark a major shift in state energy policy.

“For the first time in the commonwealth, we would direct utilities to broaden their generation of electricity to include renewables and to make a significant investment in making energy usage more efficient, on both sides of the meter,” said Kentucky Resources Council Director Tom FitzGerald.

He said Adkins’ bill would save utility customers money and reduce the number of new power plants as well as help to encourage low-carbon energy development.

Adkins did not respond to requests for an interview this week.

Greg Higdon, president of the Kentucky Association of Manufacturers, said he’d prefer a voluntary measure. Even with the exemption for industry, he said he’s concerned the bill might result in higher energy costs when manufacturers have been hit hard by recession.

More than 260,000 Kentuckians were employed in manufacturing at the end of 2006, but fell to 209,000 by the end of last year, according to the U.S. Bureau of Labor Statistics.

The managing director of a proposed coal-to-natural gas plant for Henderson County that intends to capture almost all its carbon dioxide called Adkins’ bill “a step in the right direction.”

Michael L. McInnis, the managing director of the Louisville-based ERORA group — which is developing the plant to sell natural gas, generate electricity and sell carbon dioxide — asked legislators for a law requiring utilities to buy electricity from such facilities.

“It’s a measure designed to … level the playing field between Kentucky and surrounding states,” he said, referring to other states’ cleaner-coal policies

Reporter James Bruggers can be reached at (502) 582-4645.