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Court’s resolution about coal draws response

To the Editor:

Earlier this month, the Letcher County Fiscal Court adopted a resolution that calls on us, the county’s voice in the Kentucky General Assembly, to do whatever we can to remove any possible state tax incentives a power company may receive if it switches from coal to natural gas.

To begin with, we want to make clear that we share the court’s concerns when it comes to the one-two punch the coal industry is facing from market forces and a tough regulatory environment out of Washington. We and our legislative colleagues throughout the state’s coalfields have long been united in promoting Kentucky coal and protecting those who have been hit hard by the industry’s unfortunate downturn.

One of our own, state Rep. Rocky Adkins, even carried our argument to the front page of The New York Times last May, when that newspaper highlighted how he had challenged American Electric Power shortly after it first announced its intention to switch its Louisa plant from coal to natural gas. In March 2012, meanwhile, state Rep. Leslie Combs helped lead the charge against Kentucky Power’s request for a sizeable rate increase at a time when AEP, its parent company, had seen its stock rise by nearly by 50 percent during the three previous years.

Adding to that, all three of us — and a near-unanimous majority of the General Assembly — voted this year for a resolution that calls on Congress to require the federal EPA to change its new greenhouse gas rules for power companies. The resolution noted that these new rules could needlessly cause higher electricity rates and severely limit access to coal, the very resource that has powered the country for decades and is plentiful enough to do the same for decades to come.

In response to the fiscal court’s resolution, it is important to note that Kentucky Power does not get any state tax incentives other than one that rewards power companies for using Kentucky coal. We feel sure the fiscal court does not intend us to remove this provision, given that the company continues to be a major coal customer.

Ultimately, we all have to be mindful that, while Kentucky plays a key role in the coal industry, the state cannot control what happens to the industry nationally. AEP’s decision to stop burning coal in Louisa, for example, is a direct result of a federal settlement reached in February between the company, the government and environmental groups. Kentucky had no jurisdiction in that decision.

If there is a silver lining for coal, it is that the industry is poised for a welcome return. Just last week, in fact, the Wall Street Journal reported that “there are early signs that utilities are going back to coal amid rising natural gas prices.” The article later quoted the U.S. Energy Information Administration, which wrote that U.S. utilities had cut their natural-gas use by 10 percent during the first three months of this year when compared to the same timeframe in 2012. Coal use, meanwhile, went up 14 percent.

There is hope that the worst is behind us, and that coal will again see better days in the not-too-distant future. We want the Letcher County Fiscal Court — and the constituents we and the court are proud to serve — to know that we will do all we can to make that a reality.


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