STEVEN

L. B ES HEAR GoYilRNDII
ENERGY
AND ENVIRONMENT CABINET OFFICE

OF THE SECRETARY 500 MERO STREET 12m FLOOR, CAPITAL PLAZA TOWER **FRANKFOR~KENTUCKY4~1** TaEPHONE

: 502·564-3350 TEI.l!FAX

: 502-564-7484 http

: //eec.ky .gov July 27

, 2015 The Honorable
Gina McCarthy, Administrator United States Environmental Protection Agency Ariel Rios Building 1200 Pennsylvania Avenue,

N

. W

. Washington,

DC 20460 Dear Administrator McCarthy:

L E ONARD

K

. PETERS SECRETARY In the waning days before
the release

of the final Clean
Air Act 111 (d) rule regulating greenhouse emissions
from existing electric generating
units,

I wanted

to take one last opportunity

to reiterate

a few important points about Kentucky's environment

and energy future. I feel this

is necessary

to ensure that you and others truly understand

the transition
that Kentucky's energy profile

is now undergoing

; this will result

in tremendous carbon dioxide reductions
from this sector, with
or without
the Clean Power Plan. Since the 111 (d) proposal

in June

of 2014, complaints
have been voiced

by some about the perceived leniency

of the carbon dioxide reduction target that Kentucky

and other coalheavy states received.

I

' m sure you have received those comments

as well. However,

the perception

that Kentucky

has not implemented

any measures

to reduce greenhouse gases,
nor will have

to take any actions under the proposed Clean Power Plan (CPP),

is not only unfair,

it is incorrect. As you are aware, Kentucky's electricity generation

is approximately

93% coal-fired

. However,

that

is changing rapidly and

is changing

at a considerable economic
cost. Kentucky ratepayers

will have

to absorb approximately

$4.5 billion

in pollution control and retirement costs due
to the Mercury
and Air Taxies Standards (MATS). That

is a cost

of $1,000

for every man, woman
and child

in the commonwealth.

The MATS rule alone has

a carbon dioxide reduction benefit

of an estimated

22 million short tons, annually.

Our utilities and our regulatory agencies (Divis

i on for Air Quality and Public Service Commission)

have been very aggressive

in meeting these requirements

in a timely and effective manner.

So, we have not been

" doing nothing"; rather,
we have been moving forward

. When most people think

of Kentucky,
they probably don't think

of energy efficiency

. That

is both unfortunate

and unfounded

. While
we do not have

a mandatory energy efficiency resource standard,

we do
in fact have many programs

that are achieving significant tangible reductions

in energy
use and carbon emissions

. Just as one example,

I refer you
to

: http://www. forbes.com/sites/peterdetwiler/2012/12/1 0/net-zero-schools-in-kentucky-models-for· KentuckyUnbrldledSpirit.com

An Equal Opportunity Employer M/F/0TheHonorableGinaMcCarthy,AdministratorJuly27,2015Page2KentuckyleadsthenationinNetZeroenergyschoolsandhasthesecondhighestnumberpercapitaofEnergyStarschoolsnationwide.Combined,utilitydrivenDSMprograms,state-supportedefforts,andprivate-sectorinitiativeshavecreatedavastlytransformedmarketforenergyefficiencyinKentuckyinrecentyears.Thebenefitsoftheseinitiativeswillgrowovertime.Kentucky'senergyfuture,liketherestofthecountry,isyettobedetermined.Changesareoccurringasaresultofbothmarketforcesandotherregulatorymechanisms.InKentucky,thisshiftiscomingintheformofnewnaturalgascombinedcycleplants;therefore,dispatchtoacleanerfuelisoccurringcommensurate withbuildingblock2oftheCPP.Asfarasfuelcosts,naturalgasiscompetitivewithcoal;butKentucky'sratepayersarepickingupthecapitalcoststobuildnewgas-firedgeneration.AsI'vesaidonnumerousoccasions,ourmanufacturingeconomyisvitallyimportanttothenationasawhole,anditisimperativethatourremainingcoalunitsarenotforcedtoclosebeforetheendoftheirusefullives.StrandedcoalassetsdonotservetheinterestsofKentuckyorthenation.IappreciatetheeffortEPAgavetowardrecognizingtheuniquedifferencesamongallstatesinitsproposedCPPrule.IhopethisconsiderationhaswithstoodtheunfoundedcriticismsomehavelodgedagainsttheEPAregardingthedifferentratesassignedtostates.Youwiselyaccountedfordifferencesinsuchthingsaspopulation,economicbase,andnaturalresourcesindeterminingemissionsrates.Pleasedonotlosesightofthesekeyvariableswiththefinalrule.Itrulyappreciateyouropennessindiscussingthesecomplexissuesasyouworktoreducegreenhousegasemissions.Sincerelyyours,LeonardK.PetersSecretary