Keeping 1970s- and 1980s-era old, inefficient power plants open in favor of newer, more efficient fossil-fueled plants will drive up energy costs for Kentucky’s energy customers.

Aging infrastructure has more frequent outages and can result in decreased reliability. The reliability of a plant has little to do with the fuel source and more to do with the age of the plant. Propping up antiquated coal plants puts customers at risk of increased outages.

Kentucky has the third lowest energy rates east of the Mississippi and seventh lowest in the United States due to the lowest cost generation planning model. Manufacturers are drawn to this area because of the lower energy costs. Companies also demand a cleaner, more reliable form of energy, in addition to low-cost electricity, to meet their own missions and goals. Stopping this legislation will allow Kentucky to continue its strong economic growth bringing jobs and opportunity to the Commonwealth.

Operational efficiencies of natural gas, nuclear, and other energy resources, make coal a more expensive energy resource. 99% of U.S. coal plants are more expensive to operate than modern energy power plants. Kentucky has several aging coal-fired plants established in the 1970s and 1980s that are set to be decommissioned in favor of more efficient plants.

SB 349 provides another bureaucratic review of a plant closure by a commission dominated by the coal industry whose primary intent to preserve coal as a fuel resource.

One of the provisions of SB349 states that “utilities shall not commence retirement or decommissioning of the electric generating unit until the replacement facility is fully constructed absent compelling circumstances presented by the utility.

The process, as it stands, is not broken. However, the decommissioning and building of newer plants takes several years. This new bill forcing both the new and older plants to be 100% fully operational before “starting” to decommission a plant will cost consumers hundreds of millions of dollars in unnecessary energy costs.

The new commission will delay the decision to switch to more efficient energy resources for years. Any electric company wishing to decommission a plant in favor of a modern, more efficient plant must provide one year’s notice prior to submitting an application.

Other concerns with SB 349 include:

•  Executive Committee of the new commission can ask for unlimited records.
•  Will cost taxpayers millions of additional funding.
• No decision can be made to decommission a plant until the new commission findings are reviewed.

Senate Bill 4, which was passed in 2023, already puts an additional level of review on the closure of aging coal-fired plants. This proposed Energy Commission requires an extra year-long study in addition to the other three levels of scrutiny, which will delay the process of closing our aging power infrastructure.

Electric companies retire aging power plants when it becomes uneconomical to continue to operate them. They base their replacement choices not on fuel, but the least cost generation.

Additionally, the Commission is required to do a yearly analysis of the generating fleet in Kentucky.

The proposed Energy Commission is dominated by political appointees from the coal and fossil fuel industries, whose interests are not necessarily aligned with providing the most affordable and reliable energy solution. In fact, nobody working in Kentucky’s electric companies has a vote on this commission.