The rising cost of production of coal from the Eastern Kentucky coalfields, coupled with the rapid development of natural gas from “tight” formations such as the Marcellus and Utica shales, has resulted in sharp reduction of mine-related production and employment in many eastern Kentucky counties.
While unemployment rates have declined nationally, most Eastern Kentucky counties have seen an increase. The commonwealth and each of us owe a debt of honor to those individuals, families and communities who have paid dearly in compromised occupational health and environmental quality so that we could have “cheap” electricity powered by coal.
This is also a time of significant uncertainty within the electric-utility sector, one in which decisions concerning the retiring and replacement of generating capacity could significantly affect ratepayers.
Efforts to reduce energy demand by increasing energy efficiency in the residential sector would help extend the life of existing generating capacity, and improve the quality of life of those living at or near poverty who pay a disproportionate share of their disposable income on utility bills.
We spend millions each year to fund low-income heating-assistance programs, yet those programs do nothing to better empower ratepayers to control their energy usage. Low-income households spend a higher percentage of their income on electricity, and very low-income households (at 50 percent or below the poverty level) spend significantly more than the average household.
There has never been a better time to combine a skilled workforce in need of new meaningful employment opportunities, a housing-construction sector facing a housing market that is sluggish and local economies reeling from job and tax losses due to energy-market volatility, into a comprehensive program to retrofit housing stock across Kentucky for efficiency and clean energy.
Senate Bill 303, sponsored by Senate Minority Leader Ray Jones and Sen. Johnny Ray Turner, is a visionary proposal that would provide job retraining and employment-preference opportunities for displaced miners and would divert one percent of the General Fund portion of the coal severance tax to fund subsidies and low-interest loans for home energy efficiency improvements. The bill provides for:
▪ Training in energy auditing and energy efficiency contracting certification through the Kentucky Community and Technical College System.
▪ Preference in employment opportunities for workers displaced from the coal industry and coal-related employment, including service industries.
▪ Availability of low- and no-interest loans to homeowners and owners of rental units for energy efficiency improvements.
▪ Availability of subsidized energy efficiency improvements for homeowners living below a certain income threshold (depending on fund availability), managed through the Community Action Agencies (who already have a presence in all 120 counties and a process for identifying eligible households).
The many benefits of the bill would include job retraining, new employment opportunities in energy auditing and contracting, indirect economic stimulus from purchase of material, deferral of new capital investment for energy generation, moderating energy demand and costs to ratepayers during a time of rate increases, and improvements in health and quality of life. Improving low-income housing energy efficiency also achieves cost-savings for the utility and other ratepayers by reducing unpaid bill debt, arrearages and administrative costs of collection and service termination.
Finally, the efficiency and demand savings delivered by weatherization and housing retrofit programs reduce strain on the grid, which is particularly valuable during summer and winter peaks.
Legislators across the political spectrum have expressed concern over the economic plight of the region. It’s time for every member of the House and Senate to cosponsor and support this important step toward paying our debt of honor, and for the governor to voice support for passage of SB 303 and prompt implementation of the law.
Tom FitzGerald is director of the Kentucky Resources Council.