Kentucky manufacturers’ power costs would increase, state says of proposed U.S. greenhouse gas emissions rule

FRANKFORT, Ky. (Nov. 26, 2014) – Kentucky’s Energy and Environment Cabinet on Wednesday submitted its comments regarding the Environmental Protection Agency’s proposed federal 111(d) rule on carbon emissions from new and existing power plants, which is scheduled to be published June 1, 2105.

The carbon pollution rule, which requires the nation’s fleet of existing power plants cut emissions 30 percent by 2030 from 2005 levels, is a key piece of the president’s climate legacy, and is crucial to international negotiations for a global accord.

The states have a year from the publication date to develop a compliance plan.

To download the state EEC’s full comment document, go to eec.ky.gov/Pages/default.aspx. The following is a statement released Wednesday by EEC in regards to the comments it submitted.

“The proposed Section 111(d) rule will undoubtedly have the most significant and far-reaching impact on environmental and energy policy that the United States has experienced during the last 40 years. Therefore, the Kentucky Energy and Environment Cabinet comments focus on likely economic impacts of the proposed rule; factors that could affect a state’s ability to meet emissions targets; unintended consequences; and, Kentucky’s ability to have necessary flexibility in determining how it reaches its goal to reduce greenhouse gasses.

“More specifically, for manufacturing-intensive states like Kentucky, an increase in electricity costs raises the price of goods produced, harms state GDP (estimated loss of almost $2 billion with a 10 percent increase in the cost of electricity), and causes job losses. The final rule should include a “safety net” provision that would allow states that have increased exposure to natural gas price volatility to be able to dispatch their remaining coal-fueled fleet.

“Additionally, EPA‟s expectation that individual states will have the time necessary to evaluate fully the opportunities of such a complex plan and oversee its development is unreasonable. EPA at a minimum should allow a 3-year timeline for states to submit their plans after the rule is finalized.

“The Cabinet acknowledges the input received from stakeholders from a variety of interests. We look forward to working with the EPA as this process advances to insure Kentucky’s environment and economy are both well-served.”