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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

The Good, The Bad and The Ugly: A Summary of KRC's 2006 Legislative Activity  Posted: June 9, 2006
“THE GOOD, THE BAD AND THE UGLY” : A REPORT OF KRC’S ACTIVITY DURING THE 2006 GENERAL ASSEMBLY REGULAR SESSION

Since 1984, the Kentucky Resources Council, Inc. has been engaged in legislative advocacy before the Kentucky General Assembly. Over the intervening 22 years, KRC has developed a reputation as a resource for information and a public-interest perspective on environmental and utility legislation, and as an outspoken voice for public participation in regulatory matters.

As has been the case following each session, KRC summarizes below our involvement in many of the bills that were filed in the 2006 session; some of which have become law, and others of which failed to wend the difficult path through both chambers and into the statute books.

None of this work would be possible without the support of KRC’s members and others who have donated of their resources to enable us to provide legal, technical and strategic assistance across the Commonwealth on air, waste, water, mining, resource extraction and utility policy issues.

Strengthening Lead Poisoning Prevention

Among the positive outcomes of the session was adoption of House Bill 117, which will strengthen reporting of blood lead contamination and tightens the action levels for Cabinet-ordered lead exposure abatement. Several amendments proposed by KRC were incorporated into the final bill; unfortunately the tightened standards for reporting and abatement, while meeting current CDC recommendations, are insufficient to fully protect against third-trimester in utero exposure and resulting injury. KRC will seek to further tighten those standards in the next session.

Conservation Included In Energy Policy

At KRC’s request, House Majority Floor Leader Rocky Adkins included language in House Bill 299 to request that the Office of Energy Policy strategy called for in the bill include measures to create incentives for greater energy conservation.

Protecting Rural Electric Customers By Requiring Transparency In Co-Op Affiliated Transactions

House Bill 568 allows rural electric cooperatives to engage in activities other than generating and distributing electric power, such as the sale of propane and provision of other services and goods. In response to a court decision under the former statute, the co-ops sought clear authority to engage in such activities. KRC voiced concerns with the initial bill language, since unlike investor-owned utilities whose shareholders bear the cost of losses incurred due to nonregulated activities (such as the disastrous experience of LGE in power marketing) co-operatives have no shareholders; just members who would indirectly incur any of the costs associated with a cooperative affiliated business in the event of losses.

In order to assure fair competition and to minimize the possibility of cooperatives engaging in risky nonregulated activities, KRC worked with the co-ops and the Kentucky Retail Federation to strengthen the reporting obligations of co-ops to their members, and to remove the co-op exemption from the code of conduct for affiliate transactions so that any affiliated business must be in a separate company and no subsidization of the activity by regulated ratepayers occurs.

Protecting The State’s Authority In Hazardous Waste Closure Situations

Unlike its federal counterpart, Kentucky’s hazardous waste laws required in all cases where a hazardous waste site or facility was closed, that the site be monitored for a minimum of 30 years. Federal law allows in certain limited circumstances for a shortening of that closure care period, and in Senate Bill 76 the state proposed to incorporate that flexibility.

At KRC’s request, the Cabinet agreed to include language allowing the Cabinet to require additional monitoring, site maintenance, or remedial measures any time after termination of the post-closure monitoring and maintenance of the permitted facility in the event that the cabinet determines such actions are necessary for the protection of human health and the environment.

Rewriting The Rules On Logging “Bad Actors”

Though the intent was to strengthen the enforcement powers of the Cabinet against loggers who were violating best practice requirements, the initial version of House Bill 450 actually weakened existing law. The agency and sponsor agreed to amend the bill to include language drafted by KRC to achieve the desired effect of improving Cabinet enforcement powers.

Changing Cost Recovery For New Coal-fired Power Plants

House Bill 538, which did not become law, would have changed the current method of cost recovery for certain new coal-fired power plant construction (including IGCC), by allowing utilities to recover some of the costs incurred during construction rather than through a post-construction rate case. In theory, the real-time recovery would lower the overall cost of the project and encourage investors, but at some additional risk to ratepayers who would be funding the construction with no assurance that the plant would become useful and that they would benefit from lower rates once it came on-line.

KRC worked long hours negotiating between the utilities and industrial customers to attempt to craft a bill that would protect native-load consumers while providing a mechanism to encourage deployment of IGCC and other advanced technologies. In the end, the bill did not achieve consensus, but the debate on how to allocate the risks and costs of going beyond minimum environmental compliance to advanced technologies capable of capturing and sequestering greenhouse gases, educated the legislature and public, and will continue.

A Pragmatic Solution To A Unique Reclamation Problem

One of the results of the spate of coal company bankruptcies in Kentucky was the transfer of reclamation responsibility for several mining sites to one company while the leasehold rights were transferred to a separate unrelated entity and subsequently lapsed. In order to assure timely reclamation of the sites without the necessity of forfeiting bonds (which would be inadequate to complete reclamation) KRC negotiated a limited “easement of necessity to conduct reclamation” which includes a guaranteed minimum payment to the surface landowner of $5,000 per year for the extended liability period until bond release. The law sunsets in 2008, in recognition of the unique circumstances.

Preventing Mislabeling of Multi-Layer Plastics

As has been the case in several previous sessions, KRC testified and lobbied against passage of a bill that would allow multi-layer plastic bottles to be marked with the PETE recycling code (“1”) rather than under the appropriate category of “7” for multi-resin plastics. The introduction of plastic bottles containing nylon or other barrier layers is of significant concern because of the potential to disrupt plastic recycling efforts due to rejection of loads of PETE contaminated with such bottles.

Permit-Blocking Outlaw Mine Operators

KRC worked with the House Appropriations Committee staff and the Kentucky Coal Association to include language allowing the Cabinet to block issuance of new surface and underground coal mine permits for entities that own or control other companies with uncorrected violations of the law. KRC also succeeded in having language included in the budget that allows the Cabinet to raise the salary caps for mine inspectors and engineers where necessary to attract and keep such employees. The inability to provide salaries more comparable to the private sector has hampered the agency’s ability to timely issue and monitor compliance with permits. Ruth Webb was very helpful in these efforts.

FutureGen Exemption Limited

At the request of the sponsor, KRC suggested language to better limit the exemption from the merchant power plant siting law for the proposed “FutureGen” advanced coal demonstration project. Kentucky is among several states competing for the project, which will undergo a rigorous Environmental Impact Statement review before the site is approved. (House Bill 665).

BellSouth Telecom Deregulation Bill Opposed

While ultimately unsuccessful in stopping the most irresponsible anti-consumer bill that KRC has seen in many years, KRC fought hard through the session to seek amendments to a bill allowing all local telecommunications services other than “basis” service to be deregulated without the accountability and transparency in pricing and terms that is currently required under law. KRC will work with allies to monitor the bill in order to see the effect on competition and on prices and availability of services in those areas where there is not significant competition.

STAR Program Defended

The bill (Senate Bill 39) that would have ended the STAR air toxics program in Louisville was defeated. Representative Clark’s advocacy on behalf of the program was a high point of the session, and Louisville is in his debt. The House replaced the text of the Senate bill with a substitute bill drafted by KRC at the request of leadership, and a series of negotiations between Ford Motor Company and the local air pollution district resulted in clarifications of the impact of the program on Ford, and Ford’s disengagement from the effort to end the program.

Other KRC Legislative Activities

KRC drafted, at the request of Kentuckians for the Commonwealth, an bill requiring electronic reporting of coal truck weights by shippers and receivers (House Bill 560) and a bill requiring better management and planning in disposal of excess rock and dirt material from coal mine sites in order to lessen the impacts of valley fills (House Bill 83). Neither received a committee hearing.

KRC negotiated changes intended to better protect the interests of existing landowners in a proposed airport noise planning bill (House Bill 229). The bill did not become law due to opposition from real estate and homebuilder groups.

KRC testified in opposition to a proposed “pilot project” to allow removal of trees in public rights-of-way in order to assure visibility of private billboards. The bill was approved in committee but did not secure a floor vote in the House. KRC also opposed a bill that would allow multiple message electronic billboards. That bill was not heard in committee.

KRC fought unsuccessfully to replace the $18 million dollars removed by the Fletcher Administration from the Kentucky PRIDE Fund – money that was to be spent on characterization and closure of abandoned solid waste landfills and dumps.

KRC successfully worked with representatives of the state Chamber of Commerce on improving the regulatory impact analyses that accompany state regulations while avoiding imposition of an incomplete “cost-benefit” analysis (House Bill 374).

KRC spent a total of $7,421.86 in direct state lobbying expenses, and $944.31 in state grassroots lobbying (a reflection of how much the internet has lowered the cost of grassroots communication). Both amounts are well within the limits permitted for legislative activity by non-profit 501(c)(3) organizations.

For additional information on other bills considered during the 2006 session, visit us at www.kyrc.org and review earlier legislative updates.


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