The Women's Network Commonwealth Institute for Policy Issues and Civic Engagement, or CPI, has proposed an energy plan that will move Kentucky toward energy sustainability and economic growth.
For generations, the economy of Eastern Kentucky has been plagued with challenges; despite temporary boons from coal, it has been a roller-coaster ride.
Fifty one years ago, President Lyndon Johnson visited Appalachia to spotlight rural poverty. The president's visit was a catalyst to the war on poverty and the government started providing food stamps and other programs for the poor, including Head Start, Medicare and Medicaid.
Despite these efforts, many are often faced with the decision to eat or go to the doctor versus paying their electric bill. No government programs have helped break the cycle of poverty and created long-term economic prosperity.
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CPI encouraged the passage of a new law, Energy Project Assessment Districts, which will help provide financing opportunities for energy-efficiency and renewable-energy projects.
CPI suggests policy modifications that require modest investments by the General Assembly, regulatory changes and, most importantly, a shift in priorities. Coal produces most of Kentucky's electricity, although natural gas is a growing share. Coal, while losing market share, and despite air and water concerns, will remain important in Kentucky for decades.
Kentucky's electricity generation is 93 percent from coal, whereas the national average is 40 percent. Natural gas is cleaner and is a bridge fuel from fossil fuels to renewable energy.
The following solutions are not always related, but they would all contribute to the overall goal of a cost-effective, diverse and sustainable energy policy: energy efficiency, renewable energy, determining the least cost option and economic development in rural Kentucky.
Here are the key recommendations of CPI's plan:
■ The fastest, most sustainable and cost-effective way to meet the state's future energy needs is an integrated program of energy efficiency and renewable energy. Every family, business, government office, school and church can do their part by evaluating and investing in options to seal their homes and buildings and replace HVAC and appliances with Energy Star equipment.
■ Renewable energies improve and diversify electrical-generation sources and reduce long-term costs. Enact renewable energy and efficiency portfolio standards. They would require setting a certain percentage of electricity production to be produced from renewable sources and a percentage gained from energy-efficiency improvements over a number of years.
■ The Kentucky Public Service Commission must redefine "least cost" when approving utility projects based on direct delivery costs. The analysis of utility cost considerations should be broadened to include external costs to the public such as health impacts, air and water pollution controls, and longer-term economics.
■ A portion of coal-severance tax should be diverted to a permanent endowment fund for jobs and economic development. Coal employment has fallen dramatically. As of April 1 there were an estimated 10,356 jobs — down from 17,748 in 2008 and 11,586 the quarter before.
Nationally, there are many examples of dedicated funds that Kentucky can model; Montana ($870 million), Wyoming ($2.3 billion) and North Dakota ($1.3 billion) have established permanent funds.
A rural Kentucky economic development infrastructure needs to have an independent board of directors, which will be essential to manage the fund, including regional economic-development organizations, established community organizations and leaders.
This effort should leverage the President's Promise Zone initiatives and the work of Shaping Our Appalachian Region led by Gov. Steve Beshear and U.S. Rep. Harold Rogers. Time is short, and we must work together to reverse the devastating economic depression in many Appalachian communities.