Federal Rules Hike Utility Costs at a Time When E. Ky. is Suffering
Eastern Kentucky’s persistent struggles to achieve sustained economic prosperity are well documented. It is tempting to conclude current difficulties are simply another cycle in that history. But that is not quite the case.
While most of the U.S. and Kentucky are finally showing recovery from the Great Recession, there is no recovery in Eastern Kentucky. The region has not only wrestled with the recession, but has been devastated by the decline of its coal industry.
More than half of the region’s coal-mining jobs — 8,500 of the best-paying jobs to be found — have disappeared since 2009.
The decline of Eastern Kentucky’s low-sulfur coal industry has several drivers. New natural gas recovery methods have made that fuel more cost-competitive. The cost of production has risen as easy-to-reach seams are mined out. Utilities have shifted their purchases to cheaper, high-sulphur coals in response to Environmental Protection Agency rules that forced them to add scrubbers to power plants. And additional federal regulations have steadily driven up the cost of mining and burning coal.
The federal regulations targeting coal deserve attention. They have impacted both coal mining and electric utilities. And, in turn, it has impacted people, especially coal miners and electric rate-payers.
As federal regulations continue to pile on, the most severe impact will continue to be on the people who pay the monthly electric bills, especially those on low and fixed incomes. Member-owned, not-for-profit electric cooperatives are deeply concerned about the impact on our members, who ultimately pay these bills.
Recently, East Kentucky Power Cooperative released the second of two films documenting the struggles of people in communities devastated by the coal industry’s decline. We believe it is important to make their voices heard, especially by federal policy-makers and regulators. (View the film at http://www.ekpc.coop/thepeopleattheendofthelines.html).
For decades, federal and state policies have guided our cooperatives to invest in the most affordable, most reliable means of generating electricity. In this region of the country, that has meant coal.
Most of the electricity we generate is fueled by coal. As a result, Kentucky historically has had some of the lowest electric rates in the nation, along with a dynamic manufacturing economy that depends on low energy costs.
We have continued to make prudent investments in our coal fleet. In the past decade, EKPC has added two of the cleanest coal generators in the nation, and we have retrofitted older generators with equipment to slash emissions. This represents investments of nearly $1.7 billion to remain in compliance with federal air regulations while meeting our members’ needs. It will take many years to pay for those projects.
Now, our cooperatives face proposed regulations, including the Obama administration’s Clean Power Plan, that threaten our ability to operate those plants at maximum efficiency, effectively stranding hundreds of millions of invested dollars. (Keep in mind that government policies led to those investments.)
So, in Eastern Kentucky, which has fueled much of America’s economy for generations, out-of-work coal miners and struggling families face the cruel prospect of rising electric rates at the same time government policies force utilities away from coal.
This isn’t fair. Our members deserve the assurance that their investments will not be wasted by misguided government policies.
Meanwhile, EKPC and our owner-member co-ops are proud to work alongside Gov. Steve Beshear and Congressman Hal Rogers to ensure Eastern Kentucky has a bright, stable future.
We are part of their SOAR initiative. This unique collaboration shows the greatest promise in recent generations to create sustained prosperity. But until those plans bear fruit, we hope federal policymakers come to a better understanding that their choices are creating more despair in Eastern Kentucky.
Anthony “Tony” Campbell is president and CEO of East Kentucky Power Cooperative.
- On May 9, 2015