Kentucky has historically enjoyed two main economic advantages. The first is its central location along multiple major highways and rivers, making it a natural hub for business and commerce. The second is an abundance of affordable and dependable electricity, a key driver of jobs.
However, this second advantage is being eroded by federal policies designed to shutter coal plants, at great cost to both ratepayers and taxpayers, and to replace them with less-dependable alternatives like wind and solar. In the short-term, this is dangerous to businesses that need reliable power to keep the lights on. In the long-term, it also poses a threat to Kentucky’s economic prosperity, which depends on its ability to attract investment in new and growing industries and businesses.
The fundamental contradiction between the United States Environmental Protection Agency’s regulations and economic reality has been laid bare by the recent spike in electricity demand driven by AI-related data centers. According to Boston Consulting Group, “Electricity consumption at US data centers alone is poised to triple from 2022 levels … by the end of the decade.” In response to increased electricity demand, power companies are canceling the closures of coal plants. If Kentucky has reliable electricity and lower electricity prices, it will be better positioned to grow economically.
The best time to implement a common-sense, all-of-the-above approach to energy was years ago, before the current shortfall increased the risk of rolling blackouts and undermined our ability to retain and attract new economic development opportunities. The second-best time is now, before further harm is done to our state and national economies. Policymakers and regulators need to recognize the key role that traditional baseload powerplants play in providing reliable and affordable electricity. This is especially true in the Bluegrass State, where energy is not just a convenience but a critical feature of our economy and way of life.
