Herald-Leader Editorial

Coal over consumers? Gooch has a bad idea for subsidizing the industry

November 27, 2013 

Rep. Jim Gooch is known for introducing bills that have no chance of becoming law but that make a "statement."

Gooch's statements bear more than passing notice because he is chairman of the House Natural Resources and Environment Committee. That gives him considerable sway over the well-being of Kentuckians, not to mention oversight of the state's environmental, energy and mine safety programs.

Gooch's latest statement — made via a bill he prefiled Nov. 19 — has a familiar ring: He is proposing yet another way that average Kentuckians would subsidize the coal industry.

His bill would require retail electric suppliers to maintain a 30-day supply of fuel at generating centers.

The point seems to be to give coal a monopoly by blocking the use of natural gas, which isn't stored but is transported by pipeline.

The bill is ridiculous on many levels, not least of which is that Kentucky could expect summer brownouts and blackouts without natural gas peaking plants.

Clearly, Gooch and the coal caucus are struggling with market realities. They have long assumed that coal would always be the cheapest fuel for making electricity, but that is no longer true, thanks to the proliferation of cheap natural gas.

But the legislature can't micromanage industries. And a law dictating utilities' fuel choices would raise electricity rates for all, including businesses that employ more people than the coal industry does.

Just this year, two aluminum manufacturers in Western Kentucky threatened to leave the state, taking 1,200 jobs with them, unless they were freed from contracts to buy coal-fired power from Big Rivers Electric Corp. They could buy power from natural gas cheaper on the open market.

In the east, House Democratic floor leader Rocky Adkins and other politicians have tried to save a coal-burning unit at Kentucky Power's 50-year-old Big Sandy power plant in Louisa, even though the attorney general, the other affected industries and the Public Service Commission all agreed that retrofitting the unit to keep it open would be the costliest option for ratepayers.

Kentuckians care about the thousands of miners who are out of work. But trying to carry the coal industry on the backs of electricity consumers is no solution.

A yearlong study by the Mountain Association for Community Economic Development in 2009 discovered that the coal industry costs state government $115 million a year.

That was the difference between taxes generated by coal operations and the various tax breaks and subsidies the industry receives plus $239 million spent by the state to maintain coal-haul roads.

The study did not attempt to quantify damage to air, water and human health from coal mining and coal-fired power plants.

Gooch, D-Providence, represents four counties, including three where coal is mined. His family business, West Kentucky Steel, manufactures and rebuilds heavy mining equipment, giving him a direct financial interest in promoting coal sales.

On his financial disclosure statement, Gooch reports that he is a "minority stockholder and not involved in the daily management" of West Kentucky Steel. But the company's website says Gooch and his brother Eddie are "still active in running the business on a day to day basis" and "are on the job daily to inspect the quality of all work in progress."

The appearance that Gooch, a committee chairman, continues to put narrow interests, including his own business, above the public interest is bad for House Democrats and the legislature as a whole.

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