Two major Kentucky manufacturers talked to lawmakers this week about plans to reduce carbon emissions and invest in renewable energy while stressing the need for a reliable power grid.
Both Toyota Motor North America and Nucor Steel Gallatin have major plants in Kentucky. Toyota has maintained a manufacturing plant in Georgetown since the 1980s while Nucor Steel Gallatin has operated in Kentucky for nearly a decade and last year opened a second steel mill in Brandenburg — Nucor is one of the state’s largest electricity consumers.
“All of these facilities require a lot of electricity to operate,” said Cathy Waddell, the controller for Nucor Steel Gallatin's facility. “Meeting this demand will take extensive planning, new investments and partnerships to ensure a reliable energy supply.”
Kentucky still relies almost entirely on coal for its electricity generation needs. In February 2024, about 70% of utility electricity was coal-fired, 19% from natural gas and only about 9% came from renewable sources, according to the U.S. Energy Information Administration.
Republicans pushed executives from Nucor Steel and Toyota on whether the state is meeting their energy needs. Waddell said it was paramount that energy remain reliable while encouraging the state to invest more in cleaner energy sources.
This year, Kentucky lawmakers passed legislation making it more difficult for utility companies to retire aging coal-fired power plants, adding onto previous legislative efforts to do the same. Republicans have also expressed skepticism in the ability of renewables like solar energy to replace fossil fuels.
Rep. Jim Gooch, the Republican co-chairman of the committee, pushed back against Menke and Waddell saying he’s wary to see “large corporations blindly follow some of the policies in Washington.”
“We really are looking for ways that we can help make sure that we have the reliability and the availability of power at an affordable cost,” Gooch said. “What we don't want, though, is to hear you come to us touting things that are being pushed by the current administration in Washington.”
Nucor Steel has been involved in solar energy projects in Kentucky, and Waddell said the company sees renewable energy as core to the company's growth. She encouraged the legislature to help get renewables on the power grid and asked them to invest in nuclear energy options.
“Our low-carbon steelmaking process is a competitive advantage as our customers are increasingly coming to Nucor looking for solutions to help them reduce emissions in their supply chains,” Waddell said. “Nucor has set a goal of net-zero carbon emissions by 2050.”
Toyota Motor North America Regional Director of Government Affairs Kim Allen Menke echoed the sentiments, saying they are also trying to minimize power usage, even as their operations depend on a constant supply.
In contrast, a representative of Kentucky Industrial Utility Customers — whose members include both Toyota and Nucor Steel Gallatin — bemoaned recent regulations handed down by the Biden administration, saying the “war on coal” is making energy prices rise.
“You've got a huge demand growth. At the same time, you've got supply going down,” said Michael Kurtz with Kentucky Industrial Utility Customers. “It's going down because of the war on coal… which is reliable generation, obviously.”
Coal is one of the most carbon-intensive fossil fuels and its burning releases large amounts of pollutants into the air and groundwater. Republican Sen. Brandon Smith from Hazard, the committee’s other co-chair, said the federal policies that target coal-fired power plants seem “farcical.”
“It's not just shutting the coal down, you all go with it,” Smith said.
Smith said that an unnamed businessman told him that Kentucky utilities were too expensive compared to surrounding states and kept them from moving into the state.
“It made me extremely concerned to see that we were at such a disadvantage, or someone that really wanted to expand their operation in the state of Kentucky, but the numbers just weren't there,” Smith said.
The price of energy varies broadly based on the utility company and part of the state, but on average Kentucky has relatively low energy costs for industrial and residential consumers — beating out 37 and 36 other states respectively, with one of the lowest rates in the region.
According to the U.S. Energy Information Administration, Kentucky had lower industrial energy rates on average than Ohio, Illinois, Indiana and West Virginia (Tennessee beat Kentucky by just over one-tenth of a cent per kilowatt hour).
Correction: A previous version of this story misstated the amount by which Tennessee's industrial energy rates are lower than Kentucky's. It is one-tenth of a center lower per kilowatt hour, not 10 cents lower.
State government and politics reporting is supported in part by the Corporation for Public Broadcasting.
