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Kentucky Should Prepare Plan For EPA's Carbon Rules, Regulator Says

In the final weeks of Gov. Steve Beshear’s administration, state regulators and legislators haven't closed the door on the possibility that Kentucky will create its own plan to comply with upcoming federal carbon dioxide regulations.

Len Peters, secretary of the Energy and Environment Cabinet, spoke Tuesday before a special legislative task force made up of lawmakers and industry representatives.

Kentucky is one of more than two dozen states and industry groupsthat are suing the EPA in hopes of blocking the rules to further limit carbon pollution. If that lawsuit is unsuccessful, Governor-elect Matt Bevin has said he won’t submit an individual state plan to comply with the rules.

The rule is structured so states opting not to submit their own plans would be subject to a federal blanket policy that may require even steeper emissions cuts. Bevin has indicated Kentucky wouldn’t comply with the rule at all, though legal scholars say that argument is baseless.

Peters ends his tenure at the cabinet on Dec. 7, which is also Beshear’s last day in office. He urged the legislators to lobby for a state plan — which is due in September — or, at least, submit a draft and ask the federal government for an extension.

“We continue to believe that that is the best approach: take that dual path,” he said. “Be prepared if, in fact, litigation isn’t successful.”

Peters also told the task force that Kentucky’s coal industry would fare better if the state adopts what is known as a mass-based approach to comply with upcoming federal carbon dioxide regulations.

The Environmental Protection Agency’s Clean Power Plan sets individual goals for states to reduce carbon emissions and lays out two possible paths for these reductions. One is a rate-based approach, which sets the pounds of carbon dioxide the state’s power plants can emit per megawatt hour of electricity. The other sets a flat amount of tons of CO2 that the plants can emit.

With the mass-based approach, Kentucky has to meet a goal of about 63 million tons of carbon dioxide emitted annually by 2030 — a reduction of 28 million tons from current emissions levels. According to regulators’ predictions, assuming the state’s usage remains the same (and in fact, electricity usage is projected to decrease), coal will produce at least half of Kentucky’s electricity in 2030 under this scenario. Coal is currently responsible for 92 percent of the portfolio.

Regardless, Peters said, the amount of electricity the state gets from coal will decrease.

“Everything looks like we’re going to move away from coal while we still have mineable coal sitting in the ground,” he told the committee.

Peters expects many of the reductions in coal generation will be made by power plants that already plan to shut down, or will likely retire because of age by 2030. The models assume the capacity will be replaced by natural gas, which still emits some CO2. If that capacity is replaced by zero-emissions renewables or nuclear energy, the state could get more of its electricity from coal and still comply with the new rules.

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