There are costs, benefits and, for now, a lot of unknowns for Kentucky in the federal government's call for reducing carbon-dioxide emissions from existing power plants.
The coal industry will suffer, but advocates of the proposal say it could spur creation of jobs in energy efficiency and development of renewable energy sources.
As for the price of electricity, the costs of complying with the mandate to cut carbon will push up rates, at least initially. How much, however, and whether it will be enough to drive out some manufacturing jobs are among the big unknowns.
"There will be impacts that ultimately will come down to customers," said Natasha Collins, a spokeswoman for LG&E and Kentucky Utilities.
The U.S. Environmental Protection Agency estimated that the average electric bill would increase by up to 3.2 percent in 2020 under one option in the proposal, but then go down by more than 8 percent by 2030 because of increased energy efficiency and other factors.
That estimate was not specific to Kentucky, which now has lower electricity rates than many states.
The proposal aims for a nationwide reduction of 30 percent in carbon emissions, but it recognizes each state faces different circumstances, so the cut called for in Kentucky would be 18 percent.
The proposal is less onerous than some had feared it would be, and gives electricity producers room to work with state officials and others on a compliance plan, said Don Mosier, chief operating officer at East Kentucky Power Cooperative.
"We're at least more optimistic" than earlier, Mosier said.
Mosier credited the Kentucky Energy and Environment Cabinet with advocating for a flexible approach in the proposal.
Gov. Steve Beshear said he was concerned the proposal did not include enough flexibility or attainable goals, however.
"The president's desire to protect our climate is one that I share, but that desire must be attained while also providing economic security to our families and businesses," Beshear said.
Kentucky is in a unique position in the debate that flared anew Monday over the Obama administration's efforts to reduce U.S. emissions of toxic chemicals, such as mercury, and of carbon dioxide, a greenhouse gas that most scientists agree contributes to climate changes such as more heat waves and more severe storms.
That's because the state gets more than 90 percent of its electricity from power plants fired by coal.
Many of Kentucky's coal-fired power plants are older, making the Bluegrass State first in the nation in the amount of carbon dioxide emitted per unit of electricity produced from all sources, according to a study released last month by M.J. Bradley & Associates.
As a result, efforts to limit carbon will have a bigger impact in Kentucky than in many states.
'Dagger in the heart'
Reaction to Monday's proposal was swift across the political spectrum and harsh in some quarters.
The state's junior U.S. senator, Republican Rand Paul, called it an illegal use of executive power and vowed to force a vote on repealing it.
Republican U.S. Sen. Mitch McConnell said he would introduce legislation to kill the proposal, calling it a "dagger in the heart of the American middle class,' and to democracy because Congress wasn't involved.
The proposal will decimate U.S. coal production and hurt manufacturing and consumers through higher prices, McConnell charged.
"Those who don't lose jobs to foreign competitors will see higher utility costs and other living expenses at a moment they can least afford it," he said in a statement.
A study for the U.S. Chamber of Commerce concluded that carbon limits could cost a four-state region including Kentucky 21,000 jobs a year over the next 16 years, but EPA said the analysis was based on flawed assumptions.
McConnell is locked in a tight race for re-election against Democrat Alison Lundergan Grimes, the Kentucky secretary of state.
McConnell has tried to tie Grimes to President Barack Obama and other Democrats who are seen as anti-coal, but Grimes has pushed back, saying that she doesn't agree with Obama on energy policy and that McConnell has not been effective in working to protect Kentucky's interests.
"When I'm in the U.S. Senate, I will fiercely oppose the president's attack on Kentucky's coal industry because protecting our jobs will be my number one priority," Grimes said.
Less coal needed
A cost-benefit analysis by the EPA said the proposal to cut carbon emissions would reduce the amount of coal mined for use by utilities.
One key reason is that burning natural gas to produce electricity releases less carbon. As a result, the push to cut carbon places coal at a disadvantage, and technology to remove carbon at coal-fired plants is not ready for broad commercial use.
The EPA projected that, under the proposal, coal production for power plants would go down by as much as 37 percent in the coal basin that includes Eastern Kentucky, by 7 percent to 11 percent in the region that includes Western Kentucky, and by more than 30 percent in the Western U.S.
"This is very bad news within the coal industry," Bill Bissett, president of the Kentucky Coal Association, said of the EPA proposal.
Many utilities had started switching away from coal in favor of natural gas before Monday's announcement, in part because of low natural gas prices.
Coal companies have slashed nearly half the jobs in the industry in Eastern Kentucky since 2012 because of competition from natural gas, tougher environmental rules, higher mining costs and other factors.
More pain or gain?
Opponents of the proposal to cut carbon emissions argue it would cause a load of economic pain for little gain against global emissions, because China and other nations are adding coal-fired power plants.
But supporters of the proposal say that the world's largest economy has to lead on the issue of combating climate change, and that there are great opportunities for Kentucky and the nation in the move toward cleaner energy.
Several groups, including Kentuckians for the Commonwealth, the Mountain Association for Community Economic Development and the Sierra Club, said the EPA proposal could drive creation of thousands of jobs in developing renewable energy sources and in work to upgrade Kentucky homes and businesses to make them more energy efficient.
A 2009 report by the Appalachian Regional Commission and Southeast Energy Efficiency Alliance found that implementing energy-efficiency policies could create more than 77,000 jobs in Appalachia by 2030, according to Appalachian Voices.
Cutting emissions from power plants also would create health benefits, such as fewer childhood asthma attacks and lower rates of cancer and other diseases, advocates said.
Sarah Lynn Cunningham, an engineer who heads the Louisville Climate Action Network, said the benefits of the proposal to health, the environment and the economy were clear.
"I believe the economic benefits will far outweigh the economic costs," she said.