Kentucky is fortunate to have energy rates among the lowest in the country. However, given Kentucky’s reliance on coal for electricity generation, our low electric rates are vulnerable to additional costs to utility companies for environmental compliance imposed by federal agencies. In a report issued by the Kentucky Department for Energy Development and Independence, over the past decade, Kentucky’s electricity prices have risen around 5% per year. In 2011 Kentucky’s electric rates rose an average of 5.6%, the ninth highest increase in the nation.
If these trends continue, Kentucky’s competitive advantage that it had on other states in terms of the cost of kilowatt hour for industrial sectors will be diminished and threaten the existence of energy intensive aluminum, automotive and paper manufacturing. To view the full report click here.