Op-Ed

Want more good jobs in Kentucky? Give employers access to renewable energy through ‘green tariffs’

General Motors has installed solar arrays at its Bowling Green assembly plant.
General Motors has installed solar arrays at its Bowling Green assembly plant.

A few weeks back at Kentucky’s annual Governor’s Conference on Energy and the Environment, Gov. Matt Bevin gave his vision for Kentucky becoming the undisputed center of manufacturing and engineering excellence in America. This makes good economic sense, because those jobs are well paying and provide good benefits to workers and Kentucky itself.

Although the announcement had been planned for some time, last week Toyota unveiled its new TILT Lab on its Georgetown campus which will employ about 600 engineers and 200 support staff to focus on innovation and problem solving. Bevin was quoted as saying, “It’s extraordinary for Kentucky… It’s going to be transcendent.”

Near the end of the front-page story about the lab, it was also mentioned that the building was designed to meet the top-level of energy efficiency and environmental standards (LEED Platinum). Solar panels, rain water collection and geothermal HVAC systems will help make it energy efficient and environmentally friendly.

But that shouldn’t come as a surprise. Toyota has a global goal of eliminating all carbon emissions for its operations by 2050. Likewise, GM has a 2050 goal of being 100 percent renewable, and not just in its headquarters and offices, but in its worldwide manufacturing plants as well. It has already installed solar panels in its Bowling Green Corvette plant.

And it’s not just Kentucky manufacturers. Kentucky’s large retailers like Walmart and logistics companies like UPS also seek to procure clean energy. There is even a Renewable Buyers Alliance in which these large electricity consumers participate to learn how to become cleaner in their energy usage.

As might be expected, Kentucky’s neighbors are doing everything they can to attract these manufacturing, logistics and high-tech employers. In Virginia, Gov. Terry McAuliffe just announced an economic development project that “would not have happened if we were not able to do this tariff on renewables.”

Similarly, Ohio Gov. John Kasich recently stated, “It is critical that we continue developing renewables, because, at the end of the day… if the tech companies… think that we’re not committed to renewable energy, they won’t come here. Period. End of story.”

So what is Kentucky doing to remain competitive with its neighbors?

Plenty, actually.

With a grant from the National Governors Association Kentucky’s Energy and Environment Cabinet has convened a collaborative to study in part whether Kentucky utilities should offer “green tariffs” which would enable these large energy users to procure renewable energy without impacting the other customers’ electricity bills.

The concept is fairly simple: Each utility company would develop a voluntary price for large energy users who would like to receive their electricity from an off-site, least-cost renewable energy project. The utilities will then look to either build or contract with a new renewable energy project located in the Bluegrass state that will be delivered to the large energy users through the grid.

With the declining cost of renewable energy and growing corporate sustainability goals, it’s expected that some of the biggest names in Kentucky would “opt in” to this opportunity paving the way for economic expansion as future employers think about where new to locate new facilities. These “green tariffs” should be adopted so that Kentucky has all of the tools in the toolbox it needs to be competitive in attracting these coveted employers.

As the old Chinese proverb states, “It doesn’t matter what color the cat is, as long as it can catch the mouse.” Let’s have green tariffs in Kentucky, so we can land the employers we seek.

Jim Gardner, a Lexington attorney and clean-energy consultant, served as chair and commissioner on Kentucky’s Public Service Commission.

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