Battle over coal power fuels record-breaking $9.7M spent lobbying Ky. legislature

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Energy companies and advocacy groups are always a presence among the Frankfort lobbying corps, but they took on an outsized role in this year’s legislative session.

Part of the reason: the passage of Senate Bill 349, which would put an extra hurdle in place for utilities seeking to retire fossil fuel-based power plants, fueled a conflict between the state’s utility companies and energy producers.

All told, these groups contributed to record spending in the first three months of the 2024 General Assembly — roughly $9.7 million from Jan. 1 to March 31, topping last year’s mark by about $400,000.

Four of the top 10 spenders this year have been utility companies and groups. The Kentucky Association of Electric Cooperatives spent $119,000, LG&E/Kentucky Utilities dropped $106,000, Duke Energy spent $86,500 and East Kentucky Power Cooperative spent $79,500.

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Senate Bill 349, which passed both chambers and withstood a veto from Gov. Andy Beshear, will set up an 18-member commission to review requests to close fossil fuel-fired power plants before the state’s Public Service Commission can approve or deny such a retirement. The commission’s recommendations would not be binding, but they could extend the overall timeline between application and retirement of plants.

Many Republican legislators in Northern Kentucky, where Duke Energy provides power, and Louisville, where LG&E is king, decried the bill.

Both utilities fought hard against the bill in committee by claiming that it would make it harder for them to keep rates low for consumers, even rallying groups as diverse as the U.S. Chamber of Commerce and the philanthropic organization United Way of Kentucky to write letters against it.

“Unfortunately, SB 349, while aimed at securing energy reliability, will inadvertently limit Kentucky’s ability to adapt to evolving energy markets and consumer needs,” Kevin Middleton, United Way of Kentucky president, wrote. “It will harm economic development efforts by tying Kentucky to aging infrastructure and hinder investment in modern, lower-cost, more efficient power generation.”

On the other side of the debate were coal industry interests and the commonwealth’s electric cooperatives. Kentucky’s most powerful coal magnate, Joe Craft, was involved in discussions on the bill, and an arm of the coal industry-supporting group America’s Power was a strong public advocate for the bill.

More than 100 groups spent over $20k lobbying the Kentucky legislature. Who are they?

East Kentucky Power Cooperative, the largest electric cooperative in the state, is an organization owned by 16 smaller nonprofit utility co-ops around the commonwealth. It provides power to more than 1.1 million people and has access to the PJM Interconnection, one of the largest energy markets in the world.

As of its 2022 nonprofit filing, East Kentucky Power Cooperative had more than $3.7 billion in assets and brought in almost $1.3 billion in annual revenue.

A spokesperson for the group, Nick Comer, told the Herald-Leader in a statement that it supported the bill for its focus on “reliability” but didn’t say how it affected the cooperative’s operations.

“EKPC is a strong advocate of Kentucky and the U.S. proactively protecting the reliability of the electric grid, particularly during the transition to lower carbon intensity. This measure provides a valuable tool to engage Kentucky’s energy experts, stakeholders and policymakers in thoughtful and rational discussions about grid reliability,” Comer wrote.

House GOP Floor Leader Steven Rudy, R-Paducah, told the Herald-Leader that intense lobbying tends to stem from issues that divide the policy-making caucus like Senate Bill 349.

“That one got a lot of play, and more people got engaged in that because it was such a high-stakes issue and it was a complex issue,” he said. “Typically, when you see an issue that’s pretty well divided, you’re gonna see more money coming in from both sides.”

Rudy also mentioned the debate over certificate of need programs – proponents argue its a lifeline for several hospitals while detractors like the libertarian-leaning group Americans for Prosperity say it’s anti-free market – as a reason for lobbying this year.

The Kentucky Hospital Association, a major voice against a bill to reform the program, finished seventh in total lobbying spending. Americans for Prosperity spent the 17th-most. The bill, sponsored by Rep. Marianne Proctor, R-Union, failed in an overwhelming 3-13 vote in committee.

More generally, Rudy said that lobbyists serve “an important role” in Frankfort, though “bad apples” exist as in any other profession.

“The good ones will tell you both sides of the issue, and we depend on them sometimes because we’re a citizen legislature and we don’t have an expert on every issue,” Rudy said.

Rounding out the top 10 in overall lobbying spending is the Kentucky Chamber of Commerce, the largest business organization in the state lobbied on the bill legalizing and regulating self-driving vehicles in Kentucky, which passed, as well as budget bills that inch the state closer to no income tax. It spent $151,000 in the first three months of the year.

The Pharmaceutical Care Management Association spent fifth-most of any organization, logging around $95,000. Most of it went towards advertising in a session where it stood against Senate Bill 188, which put new regulations on commercial pharmacy-benefit managers.

The Kentucky League of Cities and Greater Louisville Inc. spent ninth and tenth-most, respectively.

The league lobbied on several bills, including a piece of legislation regarding city annexation of county land, a hot button issues that once pitted city and county governments against each other but was seen as a compromise.

Greater Louisville Inc., the Louisville area’s chamber of commerce, lobbied on budget bills that included significant investment in Louisville’s downtown and throughout Jefferson County.