AN ACT relating to energy planning.

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AN ACT relating to energy planning. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 164.2807 is amended to read as follows: 3
(1) The General Assembly finds and declares that: 4
(a) The long -term economic health and well -being of the citizens of the 5
Commonwealth and the United States depends upon the availability of 6
reliable sources of energy; 7
(b) The Commonwealth has abundant reserves of coal, natural gas, and other 8
natural resources; 9
(c) The energy needs of the Commonwealth are best met by continuing to engage 10
in an all-of-the-above approach to electric generation resources, including but 11
not limited to coal, oil, natural gas, wind, solar, hydropower, nuclear, and any 12
future or emerging technologies like hydrogen power; 13
(d) The current economy and future economic development of the 14
Commonwealth requires reliable, resilient, dependable, and abundant supplies 15
of electrical power; 16
(e) The demand for reliable, resilient, dispatchable electrica l power is anticipated 17
to significantly increase in the coming decades as the Commonwealth 18
becomes home to additional manufacturing and other economic development 19
projects which increase demand for electrical power; 20
(f) It is in the interest of the Commonw ealth that it be able to generate sufficient 21
electricity within its borders to serve its own industrial, residential, and 22
commercial demand and to power its own economy; 23
(g) The electrification of the United States' economy combined with 24
unprecedented federal regulatory pressures have created an electric generation 25
resource crisis in the Commonwealth; 26
(h) Existing state and federal policies with respect to energy do not adequately 27
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address the concerns of the General Assembly or citizens of the 1
Commonwealth such that a comprehensive Kentucky energy policy is 2
required; 3
(i) Current policies at the state and federal level do not adequately assess 4
capacity, availability, reliability, or resilience attributes of existing and new 5
fossil fuel -fired, nuclear, or othe r emerging dispatchable electric generating 6
resources; 7
(j) It is the policy of the Commonwealth to maintain adequate capacity of 8
available, reliable, dispatchable, and resilient electric generation to provide for 9
the existing and reasonably projected futu re energy consumption needs of all 10
wholesale, retail, and other consumers of electricity in the Commonwealth; 11
(k) Further retirement of fossil fuel -fired electric generating resources is not 12
necessary for the protection of the environment or the health, s afety, and 13
welfare of the citizens of the Commonwealth; 14
(l) The health, happiness, safety, economic opportunity, and general welfare of 15
the citizens of the Commonwealth will be promoted and protected by the 16
operation of fossil fuel -fired electric generati ng resources and, conversely, 17
those interests would be harmed by the premature retirement of those 18
generating resources; 19
(m) The Commonwealth can support a multitude of potential electric generating 20
resources and energy fuel supply sources so as to be the national leader in the 21
production of energy in all forms; 22
(n) Local economic development is essential to the health, happiness, safety, and 23
general welfare of the citizens of the Commonwealth; 24
(o) Local economic development requires an adequate supply o f electricity to 25
support new and expanding industries and is enhanced by robust employment 26
in coal mining and coal transportation and at electric generating facilities, the 27
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local job multiplier effect of employment in the coal, natural gas, and electric 1
generating industries, and state and local taxes and other forms of economic 2
value creation for the Commonwealth; and 3
(p) The numerous energy policy challenges facing the Commonwealth require a 4
comprehensive energy policy informed by the input, judgment, exp erience, 5
and expertise of diverse stakeholders representing a variety of interests and 6
energy resources, including but not limited to coal, oil, natural gas, wind, 7
solar, hydropower, nuclear, and any future or emerging resources to achieve 8
the best results for the citizens of the Commonwealth. 9
(2) For the purposes of this section: 10
(a) "Commission" means the Energy Planning and Inventory Commission 11
established in this section; 12
(b) "Dispatchable" means a source of electric power generation that is available 13
on demand, that is not intermittent, and that can be adjusted to increase or 14
decrease its power output upon request of a power grid operator or otherwise 15
upon demand or request, or that can have its power output adjusted in 16
response to market or system needs; 17
(c) "Generation and transmission cooperative" has the same meaning as in KRS 18
278.010; 19
(d) "Intermittent" means: 20
1. A source of electric power generation from a solar photovoltaic, solar 21
thermal heating, concentrating solar thermal collector, or other s olar 22
energy collection or generation system; 23
2. A source of electric power that generates energy by harnessing wind 24
power or energy, whether through a turbine or other device; 25
3. Geothermal energy, biomass energy, anaerobic digestion, or combined 26
heat and power from solar, wind, geothermal, or anaerobic digestion 27
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sources; 1
4. Any short duration energy storage, which includes any method of 2
storing generated electricity for later dispatch to the grid, whether alone 3
or in conjunction with any other intermittent sources described in this 4
paragraph, that is equivalent to less than forty -eight (48) hours of the 5
average peak generation of the unit it is used to offset; or 6
5. Conventional hydropower and pumped storage hydropower, unless they 7
are capable of providing energy on demand, in which case they shall be 8
deemed to be dispatchable; 9
(e) "Public Service Commission" means the Kentucky Public Service 10
Commission established under KRS Chapter 278, or any successor entity 11
having the power to regulate rates and services of public utilities pursuant to 12
the powers enumerated in KRS Chapter 278; and 13
(f) "Utility" has the same meaning as in KRS 278.010. 14
(3) The Energy Planning and Inventory Commission is hereby established and 15
administratively attached to the University of K entucky Center for Applied Energy 16
Research, but it shall otherwise be independent from the University of Kentucky 17
and any Kentucky executive branch agency. The affairs of the commission shall be 18
governed exclusively by the provisions of this section. The e xercise of the 19
commission's powers conferred by this section and the carrying out of its purposes 20
and duties are essential governmental functions and are conducted for public 21
purposes. 22
(4) (a) The commission shall be composed of an eighteen (18) member board and a 23
five (5) member executive committee. Except for the state government 24
officials and the ex officio nonvoting commission board members appointed 25
by the President of the Senate and the Sp eaker of the House of 26
Representatives, each member of the commission board shall be appointed by 27
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the Governor and confirmed by the Senate as set forth in this subsection. The 1
commission board shall be composed of the following members: 2
1. One (1) representative of a Kentucky investor-owned utility; 3
2. One (1) representative of a Kentucky generation and transmission 4
cooperative, nominated by the chief operating officer of the Kentucky 5
Association of Electric Cooperatives; 6
3. One (1) representative of Kentuck y coal producers, nominated by the 7
president of the Kentucky Coal Association; 8
4. One (1) representative of Kentucky oil and gas producers, nominated by 9
the executive director of the Kentucky Oil and Gas Association; 10
5. One (1) representative of an industr y or business engaged in the 11
transportation of coal; 12
6. One (1) representative of a business engaged in the transportation or 13
distribution of natural gas, nominated by the president of the Kentucky 14
Gas Association; 15
7. One (1) representative with professional experience in the purchasing or 16
sale of fossil fuels, nominated by the president of the Kentucky Coal 17
Association; 18
8. One (1) member representing the nuclear electric generation industry, 19
nominated by the executive director of the United States Nuclea r 20
Industry Council; 21
9. One (1) member representing the interests of businesses or entities 22
engaged in activities related to the mining, milling, conversion, 23
enrichment, or fabrication of nuclear fuel or involved in the remediation 24
of past enrichment of nuclear fuels in the Commonwealth; 25
10. One (1) member representing commercial and industrial consumers of 26
electrical power, nominated by Kentucky Industrial Utility Customers; 27
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11. One (1) member representing Kentucky economic interests, nominated 1
by the chief executive officer of the Kentucky Chamber of Commerce; 2
12. One (1) member representing producers of renewable electricity; 3
13. One (1) member with experience in investment banking or utility 4
finance, nominated by the president of the Kentucky Banker's 5
Association; 6
14. One (1) member representing residential electricity consumers; 7
15. One (1) member of the House of Representatives, who shall be an ex 8
officio nonvoting member, nominated by the Speaker of the House of 9
Representatives; 10
16. One (1) member of the Senate, who shall be an ex officio nonvoting 11
member, nominated by the President of the Senate; 12
17. The secretary of the Energy and Environment Cabinet, or designee; and 13
18. The secretary of the Cabinet for Economic Development, or designee. 14
(b) The executive committee of the board shall include the following five (5) 15
members: 16
1. The director of the University of Kentucky Center of Applied Energy 17
Research; 18
2. One (1) member appointed by the Governor who has the same level of 19
education, training, and professional experience as would be required to 20
serve in the role of chief executive officer or board member of a 21
company engaged in the production of coal; 22
3. One (1) member appointed by the Governor who has the same level of 23
education, training, and pr ofessional experience as would be required to 24
serve in the role of chief executive officer or board member of an 25
investor-owned, cooperative, or municipal electric utility; and 26
4. Two (2) members elected by the commission board from the 27
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commission board membership. Any vacancy in an executive committee 1
position under this subparagraph shall be filled in the same manner as 2
the original election. 3
(c) Any appointment made by the Governor to the commission board or the 4
executive committee shall be subject to co nfirmation by the Senate. If a 5
pending appointment to the board or executive committee requiring 6
confirmation is not confirmed by the Senate upon the conclusion of the 7
legislative session during or before which the appointment was made, then the 8
member's position on the board or executive committee shall become vacant, 9
either upon sine die adjournment of the legislative session or the date that the 10
Senate votes to decline to confirm appointment, and the Governor shall 11
appoint a different replacement. 12
(d) After the expiration of their initial terms, members who are not members of 13
the legislative or executive branch shall serve for terms of four (4) years and 14
until a successor is appointed and confirmed by the Senate. Legislative 15
members shall serve during th e terms of their elected positions in the General 16
Assembly, and executive branch members shall serve during the appointed 17
terms of their state government positions. In the event of a vacancy prior to 18
the expiration of a term for member appointed by the Gov ernor, the Governor 19
shall appoint a replacement in the same manner as the original appointment, 20
and the appointment shall be subject to the same Senate confirmation process. 21
Members appointed by the Governor shall not be full -time employees of the 22
Commonwealth as defined in KRS 18A.005, and shall not be compensated for 23
their service on the board, but they shall be subject to the requirements of the 24
executive branch code of ethics established under KRS Chapter 11A. 25
(e) A majority of the commission board may select one (1) member of the 26
commission board to serve as chair of the commission board and one (1) 27
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member of the commission board to serve as vice chair of the commission 1
board. 2
(f) The executive committee may adopt rules of procedure or bylaws governing 3
the conduct of the commission's business. 4
(g) Other than being a customer of retail electric service, no member of the 5
executive committee shall have any current employment, contractual, or other 6
direct financial relationship with any utility at the time of their appointment or 7
during their service on the executive committee. 8
(h) No person shall serve as a member of the commission board or executive 9
committee if the service would cause a conflict with, or result in th e 10
disclosure of confidential information relating to, any research projects 11
performed by or in partnership with the University of Kentucky Center for 12
Applied Energy Research. 13
(i) If the review of a notice given under subsection (7) of this section would 14
result in the disclosure of confidential information to an executive committee 15
member that is prohibited under subsection (7)(c)3. of this section, the 16
executive committee member shall recuse himself or herself, and the 17
remaining executive committee members shall name a replacement from the 18
membership of the commission board solely for the purpose of reviewing the 19
notice that caused the recusal. 20
(j) A majority of the executive committee shall constitute a quorum, and the 21
affirmative vote of the majority of th e members present during a meeting is 22
necessary for any action taken by vote of the executive committee. 23
(k) The Governor shall not have reorganization power over the commission, the 24
structure of the commission, its board, the executive committee, or the hiring, 25
compensation, or termination of its executive director. Only the General 26
Assembly may reorganize or restructure the commission or the commission 27
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board by legislative act. 1
(5) The commission may employ an executive director who shall be selected and hired 2
by the executive committee, subject to confirmation by the Senate. If a pending 3
selection for an executive director is not confirmed by the Senate upon the 4
conclusion of the legislative session during or before which the selection was made, 5
then the executive director's position shall become vacant, either upon sine die 6
adjournment of the legislative session or the date that the Senate votes to decline to 7
confirm appointment, and the executive committee shall select a different 8
replacement. Until an executive director is selected and hired, or in the event of a 9
vacancy in the role of executive director, the director of the University of Kentucky 10
Center for Applied Energy Research shall serve in the role of executive director of 11
the commission. 12
(6) The commission shall be authorized to: 13
(a) Take all necessary measures to effectuate the public purposes described in 14
subsection (1) of this section; 15
(b) Assist in fulfilling the executive committee's mandatory duties regarding 16
review of planned retirement de cisions described in subsection (7) of this 17
section; 18
(c) Engage in the examination and study of: 19
1. The adequacy of the Commonwealth's existing and anticipated future 20
electric generation and transmission resources and the existing and 21
anticipated future electric demand; 22
2. The continued operation, retirement, divestiture, or other major action 23
impacting any electric power generating unit, or any pollution control 24
equipment associated with any such unit, located in the Commonwealth; 25
3. Issues concerning the adequacy of the Commonwealth's energy supply, 26
including but not limited to the economic impact of energy production 27
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and consumption in the Commonwealth, the Kentucky energy grid's 1
response to severe weather events, projected power demand and growth 2
in dema nd, land use impacts from power generation, local economic 3
impacts resulting from the closure of electric generating resources, and 4
whether alternatives to decommissioning electric generating resources 5
exist; 6
4. The effect of any federal policy which may i mpact the availability of 7
dispatchable power or the adequacy of energy supplies in the 8
Commonwealth; 9
5. The Commonwealth's ability to participate in energy markets or in the 10
production, transmission, or distribution of energy; 11
6. The Commonwealth's ability to finance or provide financing assistance 12
to energy producers to encourage additional energy production in the 13
Commonwealth; 14
7. New and emerging electric generating technologies that could supply 15
future electric demand in the Commonwealth; and 16
8. Whether the Commonwealth's energy resources are sufficiently 17
dispatchable to ensure against loss of electrical power supply in the 18
event of extreme weather or other unexpected or catastrophic events that 19
may challenge the ability of the Commonwealth's electrical grid to meet 20
demand; and 21
(d) On or before December 1, 2024, and each December 1 thereafter, submit a 22
report with recommendations, including but not limited to recommendations 23
for statutory changes or budgetary proposals, to the Legislative Research 24
Commission, the Governor, and the Public Service Commission concerning 25
any of the issues examined or studied by the commission pursuant to 26
paragraph (c) of this subsection. The annual report shall also include a 27
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current inventory of the Commonwealth's existing el ectric generation and 1
transmission resources, the commission's forecast for any changes in 2
demand for electric generation and transmission resources for the next five 3
(5) years, and recommendations for how to best address any discrepancies 4
between the curr ent electric resource inventory and forecasted future 5
demand. 6
(7) (a) Notwithstanding any provision of law to the contrary, no utility shall retire 7
any existing coal, oil, or natural gas-fired electric generating plant, or any unit 8
within the plant, prior to submitting notice to the commission and receiving 9
the findings from the executive committee, as described in this subsection. 10
(b) A utility proposing to retire any existing coal, oil, or natural gas -fired power 11
plant, or unit within such plant, shall gi ve notice to the commission's 12
executive committee, in the form and manner as the executive committee may 13
require, at least one hundred eighty (180) days prior to submitting the 14
retirement application to the Public Service Commission required by KRS 15
278.264(1). The utility may include with its notice any information the utility 16
believes will assist in the executive committee's review of the proposed 17
activity. 18
(c) 1. The executive committee or executive director may require a utility 19
filing notice under this subsection to provide any information, records, 20
or data that the executive committee or executive director deems 21
reasonably necessary to make its findings under this subsection, and the 22
utility shall respond to all such requests within a reasonable timefra me 23
as established by the executive committee or executive director. 24
2. A utility responding to an information request may designate 25
information, records, or data provided in the response as confidential 26
business information, and the information, records, o r data shall be 27
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exempt from disclosure under the requirements of KRS 61.870 to 1
61.884. 2
3. A utility responding to an information request may indicate in its 3
response that the information, records, or data provided should not be 4
shared with specific members of the commission board or executive 5
committee to avoid an unfair competitive or market a dvantage, in which 6
case the confidential information, records, or data shall not be shared 7
with or made available to that member or members. 8
(d) Other than being a customer of retail electric service, any member of the 9
commission board who has an employme nt or contractual relationship with 10
the utility filing the notice required by this subsection shall have no contact 11
with the executive director or any member of the executive committee 12
concerning the proposed activities described in the notice. 13
(e) Within ninety (90) days of its receipt of the notice required by this section, the 14
commission shall hold a public hearing in the county in which the retirement 15
is proposed to occur in order to receive public comments on the proposed 16
activity. 17
(f) Within one hundr ed thirty-five (135) days of receiving a utility's notice of a 18
proposed retirement, but following the public hearing described in paragraph 19
(e) of this subsection, the executive committee shall issue a final report 20
containing written findings and recommend ations concerning the proposed 21
retirement. The executive committee's written findings and recommendations 22
shall include: 23
1. The impact of the proposed activity on the available supply of 24
dispatchable and reliable power within the Commonwealth, including 25
the ability of the Commonwealth to meet future demand growth or 26
respond to extreme weather events; 27
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2. Whether alternatives to the proposed activity exist, and whether those 1
alternatives should be further evaluated prior to proceeding with the 2
proposed activity; 3
3. Whether the replacement of the generating unit or units subject to the 4
proposed activity with other generating resources will result in any 5
adverse land use impacts in the Commonwealth; 6
4. Whether the proposed activity will result in loss of revenu e to the 7
Commonwealth or any local government unit; 8
5. The positive or negative economic impact of the proposed activity on 9
the local economy of the area in which the proposed activity will take 10
place; 11
6. The economic impact of the proposed activity on the Commonwealth as 12
a whole; and 13
7. The impact of the proposed activity on the Commonwealth's ability to 14
increase the available supply of electrical power for current or future 15
economic development purposes. 16
(g) The findings of the executive committee that ar e approved by a majority of 17
the members of the executive committee shall be designated as findings of the 18
commission and shall be submitted to the Public Service Commission. If no 19
majority decision of the executive committee is reached with respect to the 20
findings, the report shall so indicate, and each member of the executive 21
committee may make a written statement of position concerning the proposed 22
activity by the deadline provided for in the report. Each written statement 23
shall be included in the report and transmitted along with the report to the 24
Public Service Commission. Any executive committee member dissenting 25
from the report, any portion of the report, or any specific findings in the report 26
may, within one hundred eighty (180) days of the utility fi ling notice of the 27
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proposed activity, transmit separate dissenting findings to the Public Service 1
Commission. 2
(h) The executive committee's written report, and any dissenting statements 3
provided to the Public Service Commission, shall be included in any 4
retirement application made to the Public Service Commission under KRS 5
278.264, and the Public Service Commission shall not approve any retirement 6
application without considering all information received from the executive 7
committee or any member of the exec utive committee. Any order of the 8
Public Service Commission in a proceeding under KRS 278.264 shall contain 9
specific written findings of fact or conclusions of law addressing whether the 10
executive committee's findings and recommendations were considered by the 11
Public Service Commission. 12
(i) No retirement application to the Public Service Commission under KRS 13
278.264 shall be deemed administratively complete unless it includes either 14
the executive committee's report submitted pursuant to this section or 15
evidence that more than one hundred eighty (180) days have passed since 16
notice was submitted to the commission as required in paragraph (b) of this 17
subsection and no executive committee report or determination has been 18
provided to the utility. 19
(8) Notwithstanding any provision of law to the contrary, the executive committee, or 20
the executive director if authorized by the executive committee, shall have standing 21
to participate as an intervening party in any case or other proceeding before the 22
Public Service Commission. 23
(9) Subject to available funding, the executive committee may employ administrative 24
staff or third -party consultants with expertise in the subject matter of any study, 25
examination, or review undertaken by the commission to assist in carrying out the 26
commission's functions under this section. 27
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(10) The commission shall cease to exist on December 31, 2035. 1