New Study Shows Kentucky’s Reliance on Aging Coal-Fired Power Plants is No Longer the Least-Cost Electricity Option for Ratepayers
Analysis finds that investments in more renewable energy, battery storage, and demand-side resources would lower electricity costs while maintaining grid reliability for Kentuckians.
A new analysis of Kentucky’s electric utilities system shows that the Commonwealth’s continued reliance on aging, uneconomic coal plants is costing more and heightening risks for Kentucky’s households and businesses. The study, commissioned by Kentucky Resources Council, Metropolitan Housing Coalition, Mountain Association, and Earthjustice, and supported by Kentucky Solar Energy Society and Kentuckians for the Commonwealth, evaluates multiple energy pathways through 2050 and identifies strategies that would better meet Kentuckians’ electricity needs at a lower cost and risk to Kentucky ratepayers.
The analysis concludes that transitioning away from aging coal-fired power plants as they become uneconomic — and accelerating investments in renewable energy, battery storage, and efficiency instead of new gas-fueled power plants — could save Kentuckians billions of dollars while maintaining reliable electricity supplies across the state.
Key findings from the modeling
A cleaner and more diverse energy mix is the least-cost reasonable path forward.
Transitioning away from aging and uneconomic coal generation — while avoiding the significant expansion of gas-fired units planned by Kentucky’s utilities — could save electricity customers $2.6 billion through 2050. When potential carbon-related compliance costs are considered, billions more would be saved.
The Least-Cost Portfolio includes renewable energy, energy storage, and demand-side resources at significantly higher levels than currently planned by Kentucky’s regulated electric utilities.
Kentucky’s electric utilities can pursue a portfolio focused on no-regrets resource decisions: renewable energy, energy storage, and demand-side resources, without the cost of building gas-fired capacity. This alternative portfolio is reliable, reduces costs, mitigates risks related to climate policy and load growth uncertainty, and lowers consumer exposure to fuel price volatility.
Kentucky can achieve a 95% clean energy portfolio by 2050.
One scenario modeled in the study demonstrates that the Commonwealth could reach 95% clean energy by 2050 without increasing costs compared to the current baseline — but only if utilities begin shifting course now.
Impact of recent state laws
The report also examines the effects of Senate Bill 4 (2023) and Senate Bill 349 (2024), which create a presumption against retirement of fossil-fuel units and prevent the use of most renewables for replacement capacity. According to the study, these laws are hindering the deployment of lower-cost and cleaner alternatives, are increasing financial risks for ratepayers, and are making it harder for utilities to address climate challenges with no regrets energy strategies that are as reliable and more resilient.
Voices from KRC and our partner organizations
“Kentuckians deserve energy decisions grounded in facts, not assumptions. This report demonstrates that Kentucky can chart a cleaner, more reliable, more fair energy future. Propping up uneconomic power from aging coal-fired power plants raises risks and costs for Kentucky families and businesses. A more diverse portfolio grounded in renewable energy, battery storage, and energy efficiency can produce and maintain the reliable, least-cost electricity that has long been one of the Commonwealth’s greatest economic advantages.”
— Ashley Wilmes, Executive Director, Kentucky Resources Council
“Energy costs have direct economic, environmental, and health impacts on low- and fixed-income households. This report shows that Kentucky’s future isn’t in doubling down on outdated coal-fired power or turning to new gas generation.”
— Tony Curtis, Executive Director, Metropolitan Housing Coalition
“Aging coal units are no longer the cheapest way to keep the lights on, especially when extreme weather puts added strain on the grid. Modernizing Kentucky’s energy system will strengthen reliability and help families and businesses thrive.”
— Robin Gabbard, President, Mountain Association
“When Kentucky laws block the retirement of uneconomic coal plants and block building new renewable resources, they are raising every household’s electricity bill.”
— Cassandra McCrae, Senior Attorney, Earthjustice
