Kentucky

“Coal is simply a noncompetitive commodity in today’s marketplace, and Washington politicians can do next to nothing to change that fact,” writes an emeritus professor at the University of Kentucky.

Tracts in Kentucky, Tennessee, and Virginia are among those recently bought up by the Nature Conservancy under a program to draw developers and stimulate job creation and local economic activity.

Corporate and industrial demand is driving the development of a nascent utility-scale solar industry in Kentucky. Brand-name companies that are promoting the shift include Dow Chemical, Toyota, Facebook and Google.

The authority signed deals for 484 megawatts of solar and said it would develop thousands more. The news comes days after TVA closed its 1,205-megawatt Paradise coal plant in Kentucky.

Blackjewel and Revelation “have failed to make progress on scores of environmental obligations and might leave Kentucky taxpayers on the hook for tens of millions of dollars in reclamation costs.

Even Kentucky is seeing an energy-industry makeover with retirements of the Drakesboro and Elmer Smith power plants this year. Consensus is that the state’s power-generation sector will continue to modernize.

About 75 workers let go by Perry County Coal have yet to receive final paychecks, and 24 remaining employees haven’t been paid since mid-December. Miners fear precedent has been set.

Eleven coal companies have filed for bankruptcy in the past two years as utilities change their business models. State data—even from Kentucky and West Virginia—shows coal-consumption declines accelerating.

Lawmakers are drafting legislation to enforce a statute that requires coal companies to post payroll bonds “to make sure our miners don’t get screwed over.”

The ongoing decline coal industry in Kentucky and West Virginia has forced a deep reassessment among workers: “What we’ve been doing is trying to transition into the 21st century and get on past coal.”

After filing bankruptcy on Monday, Revelation Energy and its affiliate Blackjewel told workers not to report for their next shifts. Revelation/Blackjewel employs miners in Kentucky, Virginia, West Virginia and Wyoming.

An initiative in Morehead “is taking a portion of our state that prided itself on powering the country in the coal industry and pivoting to being a leader in sustainable agriculture.”

A program tied to the growing energy-efficiency sector pays former coal miners full-time wages with benefits while they learn “the intricacies of lighting, weatherization, solar panels, and decoding utility bills.”

Activists are making the case for more investment in southeastern Kentucky’s tourism economy as a way to leverage the area’s history and coal-industry legacy.

As local coal severance tax revenues have dropped from almost $1 million annually to $83,900, the sheriff of Martin County, Ky., has struggled to maintain law-enforcement norms.

Tennessee Valley Authority directors voted 6-1 to close two money-losing plants even though President Trump had pressed for a different outcome. “This decision is about economics,” said the TVA’s CEO.

At the vanguard of a regional push for a “post-coal Appalachia,” the Mountain Association for Community Economic Development seeks a paradigm that is “more sustainable, more diverse, more equitable and more resilient.”

The remaking of Owensboro, Ky., is “both more complicated and more encouraging than the widespread job losses and civic desolation that characterize coal plant shutdowns in other Ohio River Valley towns.”

A prosecutor in Knott County, Ky., has resorted to garnishment proceedings to extract more than $2 million in back taxes sorely needed for public school operations and local government services.

A $4 million grant from the federal Abandoned Mine Lands Pilot Program will go toward reclaiming a former mine site so that an aluminum-production plant can be built there. The $1.5 project is expected to create 500 new jobs by 2020 “for our highly skilled, readily available workforce,” Rep. Hal Rogers said in announcing the grant. “It also paves the way for future economic development opportunities and helps us reimagine Kentucky’s Appalachian region as a major manufacturing hub.”

A Louisville tech startup called Interapt has attracted hundreds of applicants for training and jobs designing web and cellphone apps. The opportunity, part of a private sector push to bring Silicon Valley employment “inland,” has drawn interest from coalfield-region residents who seek a future beyond mining. “Why outsource coding jobs to Bangalore when we can insource jobs to eastern Kentucky, poor in jobs but rich in work ethic, and every one I.T. job brings four or five other jobs with it?” asks the founder of the company.

A “bourgeoning renewable energy movement” in Kentucky is the subject of a documentary premiering this week in Lexington that looks at the growing popularity of electric cars. "What surprised me is that folks in Eastern Kentucky are a lot more enthusiastic about the prospect of new energy, energy like solar and battery technology, than I would have thought they might have been ... or than I think national media leads us to believe that communities are out there," the filmmaker said.

While the coal-based economies of eastern Kentucky and West Virginia continue to decline, the region’s electricity rates are soaring as utilities spread costs among fewer customers. Ratepayers are essentially subsidizing companies like Kentucky Power to keep outdated plants online and to clean up after those that have been retired. “They are charging us for shutting down our coal-fired plants that were keeping us all employed," said Angie Hatton, a Kentucky legislator.

Kentucky Power’s Mitchell plant, which produces power for 168,000 customers in 20 eastern Kentucky counties, has sold $17.6 million in coal that it had stockpiled but will not burn because cheaper electricity can be produced from natural gas and renewables. The news is reflective of a downturn in eastern Kentucky’s coal industry, which employed 14,000 people in 2011 but fewer than 4,000 during the first three months of this year. “The sale comes amid a changing energy landscape in the country. In 1990, coal-fired power plants generated about 52 percent of the electricity in the country … by the end of 2017, coal’s share of national electricity generation had dropped to 30 percent.”

A new law makes it harder for Kentucky miners to qualify for workers compensation to pay for treatment. The law new law specifies that only physicians with a specific qualification are elligible to be heard in black lung claims.

A Kentucky newspaper applauds news that federal prosecutors have indicted eight mine managers on charges that they faked coal-dust monitoring results to avoid spending money on proper mine ventilation and to gain a cost advantage over competitors. The charges carry penalties of $250,000 and up to five years in prison. “Stiff punishments,” the editorial notes. “But, then, black lung is a death sentence.”

In a pilot project to reclaim land left mostly barren from the closure of Kentucky’s first mountaintop removal coal mine, nonprofit developers plan to open the 12,500-acre Appalachian Wildlife Center by 2020. The idea is to “kick off economic diversity based on conservation instead of coal mining,” says a wildlife biologist leading the initiative. Construction began in June with $35 million raised from donors and the U.S. Office of Surface Mining and Reclamation Enforcement. Plans include expectations that the center will attract hundreds of thousands of visitors annually.

In announcing the retirement by 2020 of its 54-year-old coal-fired electricity plants, a Kentucky city is joining a market tide toward transition. The closure will affect 60 employees, and while the city of Owensboro will continue to get electricity from some conventional sources, it is now pursuing a solar power purchase agreement. “It’s just as in when your car gets older, or any other piece of mechanical equipment, it becomes harder and harder and more expensive to maintain it,” said a utility spokeswoman of the decision to close Elmer Smith Station.

Characteristic of the coal-fired electricity-generation industry nationally, a locally-sourced Kentucky plant owned by Henderson Municipal Power & Light has been all but mothballed. Expense is the prime factor as officials decide whether to keep it open: “It costs about 33 times more to produce energy from Station Two than it does to buy it on the open market.” Part of the plant has been closed already.

A Charleston newspaper columnist advocates for moving the 50-year-old Appalachian Regional Commission to West Virginia, the only state whose borders are entirely within Appalachia. While Kentucky appears favored in a push to relocate the commission to a city in the region, the author argues that West Virginia should not “roll over on this one” and that the state’s governor and congressional delegation “should openly compete for it, starting now.”

Cumberland, Benham, and Lynch, Ky., “face stark challenges because of declining tax bases and other problems” as they continue to consider the possibility of merging operations to survive. The Tri-City Chamber of Commerce is advocating for the move, in the municipalities’ best interest, and on the strength of a review by the Kentucky League of Cities.

Big Rivers Electric, an electricity cooperative that supplies power to 22 counties in western Kentucky, is seeking to end a contract with a Henderson coal-fired plant it has had in place since 1972. A Big Rivers spokesman said the cooperative has concluded the plant is "no longer capable of normal, continuous, reliable operation in an economic manner."

Grassroots movements by teachers in Kentucky, Oklahoma, and West Virginia are calling for coal, gas and oil companies to invest more in local education. The movement is rooted in the premise that tax policies favoring corporations and the wealthy have not been in communities’ best interests. “Shared prosperity and natural resource extraction tend not to go hand in hand,” noted one advocate for change.

A new study that compiles data from the Mine Safety and Health Administration, the U.S. Energy Information Administration and the Securities and Exchange Commission finds that low natural gas prices, stagnant demand for electricity, and rising production costs have driven the decline of mining in Kentucky and West Virginia. “In central Appalachian coal is deeper in the ground and the seams are thinner,” one expert said. “Because we’ve been mining coal for so long and so aggressively, we’ve already taken out all the easier to get coal.”

In West Virginia, programs like Refresh Appalachia, Reclaim Appalachia, and the Appalachian Bee Collective are helping former coal workers, and communities, create a path forward. "...the idea is to create a new generation of small-holding Appalachian farmers who will contribute to a larger agricultural community—one that’s appropriately scaled, diversified, and vertically integrated. "

Coal production near Hazard, Ky., has dropped to about 4 million tons a year from 17 million tons a decade ago, and where there were once dozens of coal companies in the region there are now only seven. The labor-force participation rate is roughly 44 percent, compared to 70 percent annually. Economic diversification lags, and towns in the region are in dire financial condition. "We're still dealing with the aftermath of layoffs in the coal industry," said a spokesman for the Hazard-based Eastern Kentucky Concentrated Employment Program. "You don't recover from the loss of 13,000 coal industry jobs [in eastern Kentucky] since 2011 overnight."

Letcher County, in east-central Kentucky, had a thousand coal miners a decade ago. “Today, there are just 28,” and the local economy is so battered that public schools are struggling to make ends meet. Student are beginning to openly advocate for progressive change and economic diversification.

The president of Kentucky Highlands Investment Corp. describes progress toward economic diversification in Eastern Kentucky, where data shows gains in career education, self-employment, and property-value assessments as education, entrepreneurship, and private-public partnerships begin to offset coal-industry losses. “Our people must be the solution,” writes the author.

Three distinct trends continue to work against the U.S. coal industry. One is a rapid rise of black lung among miners in Kentucky, Virginia, and West Virginia, where old coal seams that are increasingly difficult to tap are creating new health hazards, according to research by Stone Mountain Health Services. Two is national momentum toward retirement of the aging fleet of U.S. coal-fired electricity generation stations. Three is a Trump administration plan that is being crafted to bail out failing coal plants. “What seems clear from all three cases is that the coal industry isn’t coming back,” says the author.

A Kentucky newspaper, editorializing on the decline of the state’s coal-mining industry, calls for greater diversification of the region’s economy. The editorial acknowledges broad energy market changes and notes by way of example that the Big Sandy Power Plant in Lawrence County, one of the “largest and most dependable customer for coal mined in the eastern third of the state,” no longer burns coal. And it concedes that much of the region’s coal has gotten so costly to mine that the industry is no longer competitive.

Even with a recent uptick in coal-industry jobs in Kentucky, analysts do not consider the gains sustainable. Even the federal government is skeptical: “The U.S. Energy Information Administration projects that after an upturn in coal production in Central Appalachia in 2017, production in the region will generally decline.”

The Appalachian Regional Commission has published a study by researchers at the University of Tennessee and West Virginia University that documents “a vicious cycle at work” in the decline of the coal industry and its wide-ranging impact on local and regional economies. “Talk of bringing back coal is a distraction from the real work that needs to be done,” said the president of the Mountain Association for Community Economic Development.

A California company plans to build a plant in East Kentucky to make batteries for the burgeoning electric-vehicle market. It will also move its headquarters to the area, bringing in a total of more than 1,000 jobs. State Sen. Ray Jones said the deal is “a game-changer not only for Pikeville and Pike County, but for the entire region.”

In a trend spanning Asia, Europe and the U.S., former coal-mine sites are being reclaimed as utility-scale solar electricity-generation farms. A project by Berkeley Energy Group to turn a strip mine in Kentucky into a solar power plant that could produce 50 to 100 megawatts of power by next year is mong the many examples. “Building solar power plants atop defunct coal plants has several advantages, including putting otherwise hard-to-use lands to productive use.”

“Agriculture and large-scale manufacturing typically doesn't exist in mountainous areas, so we saw that there was earning potential equivalent to our mining jobs in the tech sector, and that there was a demand for tech workers and that that was a product we could produce here and export over fiber optic cable to the greater market in the world.”

PPL, the company that owns Kentucky Utilities and Louisville Gas and Electric has published a transition analyst in which it sees natural gas and renewables accounting for 80 percent of its electricity: “Just by virtue of [economics], you’re going to have substantial reductions and when you look out to 2050, substantial retirements of our coal-fired units will have happened by then.”

The Kentucky Valley Educational Cooperative, which includes 22 school districts, is promoting new possibilities for a region that has been overly reliant on coal mining. “It’s called the resource curse in economics … When you have a company town, what tends to happen over time is you crowd out the potential of other industry to make a case for their future.”

The East Kentucky Advanced Manufacturing Institute this week began classes aimed at teaching new job skills to former coal miners in Johnson County. “Officials said jobs in the manufacturing industry will pay the same or more as what former coal miners were making,” a local television station reports.

Kentucky manufacturers that include Toyota and GM are showing a growing preference for renewable-powered electricity, and so are retailers like Walmart and logistics companies like UPS. The trend has given rise to the possibility of a state “green-tariff” program that many large power users would likely support.

Senate Majority Leader Mitch McConnell of Kentucky “may have undercut” the Trump administration’s proposed coal-industry bailout by confirming the appointments of two free-market regulators to a panel that will vote on the plan. One replaces a former McConnell aide, and the other has been a wind-industry lobbyist. Both “have vowed not to tilt electricity-market rules in favor any particular fuel.”

The latest employment data from the Kentucky Energy and Environment Cabinet shows jobs weakness in coal. “We are stopping the bleeding, but it has not stopped,” said the president of the Kentucky Coal Association. “We’re starting to get to that flat-lining point.”

Three towns in Harlan County are exploring the possibility of merging into a single municipality as the area copes with the effects of having lost more than half its coal jobs since 2011. “It takes a lot of strong leadership to even have the discussion,” says a representative of the Kentucky League of Cities.