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In America's Coal Country, States Emboldened to Ditch Efficiency

In Coal Country, States Feel Emboldened to Cut Energy Efficiency

(Bloomberg) -- Efforts to cut America’s use of energy are coming under attack, both in Washington and in at least two states.

Ohio lawmakers held hearings this week on a bill that would scale back programs designed to shrink energy demand. Kentucky regulators began a review last month of its own energy efficiency programs after the state’s utility said their costs to consumers jumped 20-fold last year. This all comes as President Donald Trump is proposing to cut billions in federal funding for such conservation programs.

These regulatory rollbacks, surfacing in the heart of coal country where states rely on the rock for the majority of their power supplies, may help Trump deliver on a campaign promise to bring back mining jobs. Environmentalists warn that eliminating such programs could lead to the use of more coal-fired electricity generation.

“The tone set by Trump has emboldened some state efforts to roll back clean energy,”  said Samantha Williams, a staff attorney for the Natural Resources Defense Council in Chicago. “This is all about ideology. Ohio has had $2 billion in net savings from efficiency programs since 2009.”

Kentucky gets 87 percent of its power from coal and Ohio gets 57 percent, according to the U.S. Energy Information Administration.

While some states are going the opposite direction and and beefing up efforts to promote efficiency and green power, environmental groups worry that the programs will fall away in certain places. Proponents say they benefit consumers by reducing their utility bills.

In America's Coal Country, States Emboldened to Ditch Efficiency

Bill Seitz, chairman of the Public Utilities Committee in Ohio’s House of Representatives, said the efficiency measure is the first of three bills he’s considering this year that would support state power suppliers. The first bill would also eliminate a requirement that utilities get 12.5 percent of their power from renewable sources by 2027. A similar measure passed late last year and was vetoed in December by Governor John Kasich.

Another measure would provide financial support for Ohio’s nuclear power plants after Exelon Corp. last year won subsidies for its reactors in New York and Illinois.

“I’ve got three box cars coming one after another,” Seitz said in an interview. He said he introduced the first because “we don’t need these mandates.” The next bill would provide additional support for nuclear reactors through a zero-emission credit and a third would make it easier for utilities to invest in new power plants, he said. 

Mine Closures

Kentucky’s Public Service Commission last month began a review of efficiency programs for cost-effectiveness and necessity. Kentucky Power spends about $6 million a year on efficiency in a region that’s been hobbled by coal mine closures and stagnant energy demand.

"Is it worth making this sizable investment into demand-side management programs and burdening the ratepayers of that utility with these large demand-side management surcharges at a time when the load is declining anyway?" Andrew Melnykovych, director of communications at the commission, said in a phone interview.

Matthew Satterwhite, chief operating officer of Kentucky Power, said energy efficiency programs “did very well, and therefore there are a lot of costs associated with that, more than what was expected."

Kentucky Power didn’t say how much the program’s investments save consumers each year through lower bills.

Meanwhile, eight states including California, New York and Massachusetts are going a different direction, seeking to expand renewable energy mandates. California and Massachusetts are weighing a complete shift away from fossil fuels by 2050, according a report from Moody’s Investors Service Inc.

“These goals highlight how states are re-assuming the leadership mantle in the absence of federal mandates,” Moody’s analysts wrote on March 7.

In America's Coal Country, States Emboldened to Ditch Efficiency

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Source: Bloomberg

To contact the reporters on this story: Christopher Martin in New York at cmartin11@bloomberg.net, Ryan Collins in Houston at rcollins74@bloomberg.net.

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Jim Efstathiou Jr., Christine Buurma