Special Subcommittee on Energy


Minutes of the<MeetNo1> 1st Meeting

of the 2004 Interim


<MeetMDY1> June 18, 2004


The<MeetNo2> 1st meeting of the Special Subcommittee on Energy was held on<Day> Friday,<MeetMDY2> June 18, 2004, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Tanya Pullin, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Tanya Pullin, Co-Chair; Senators Charlie Borders, David Boswell, Alice Kerr, Vernie McGaha, and Joey Pendleton; Representatives Royce Adams, Rocky Adkins, Eddie Ballard, Carolyn Belcher, James Bruce, Buddy Buckingham, Dwight Butler, J. R. Gray, Rick Nelson, Fred Nesler, Tom Riner, Brandon Smith, Charles Walton, and Brent Yonts.


Guests:  Ms. Ellen Williams, Mr. Bob Amato, Mr. Garnett Thurman, and Ms. Beth O'Donnell, Public Service Commission; Ms. Vicki Jozefowicz, Kentucky Association for Community Action; Ms. Karen Doyle, Ms. Glenna Reed and Ms. Rosanne Barkley, Division of Family Support; Mr. Eric Gregory, East Kentucky Power; Mr. Don Colliver, University of Kentucky; and Dr. Ari Geertsema, Center for Energy Research, University of Kentucky.


LRC Staff:  D.Todd Littlefield, Tanya Monsanto, and Sheri Mahan.


Representative Pullin greeted the committee and introduced the two new members, Representatives Rick Nelson and Brandon Smith.


Next, Ms. Ellen Williams, the Vice Chairman of the Public Service Commission (PSC) introduced herself and the other new PSC appointees.  They are Chairman Mark David Goss (not attending), Executive Director Beth O'Donnell, Deputy Executive Director Robert (Bob) Amato, and Mr. Garnett Thurman as legislative liaison.  Ms. Williams gave a brief personal history and then outlined the purpose and jurisdiction of the PSC.  Then, Ms. O'Donnell gave a personal history and briefly discussed her work with the Missouri Public Service Commission and Illinois Power Company.


Senator Borders welcomed the new PSC appointees and commended them on the good work that the PSC has always provided the legislature.


Representative Pullin asked for an update on the Kentucky Utility case.  Ms. O'Donnell stated that it is a pending case and that the order is due to be made public June 30, 2004.


Representative Bruce commended the presentation by the PSC.


Representative Adkins asked Ms. O'Donnell to comment on Illinois' coal incentive program, its success, and how it has affected the coal industry in that state.  Ms. O'Donnell stated that she worked on the coal regulatory reform act in Illinois, whose purpose was to promote Illinois coal.  Bonding had been in place prior to the act, but in the new provisions the state carved out part of the yearly revenue from those bonds to promote clean coal technologies.  She stated that all interested parties worked on the energy policy prior to any legislation being passed.  She offered her knowledge and expertise to see if similar legislation would be appropriate and effective in Kentucky.  Representative Adkins emphasized the importance of coal to Kentucky and the nation, and the need for an aggressive state energy policy to keep Kentucky competitive.


Representative Pullin called the members attention to the committee resolution included in their packets which the members passed last interim calling for the new administration to make energy policy and energy issues a top priority.


Representative Gooch commented on the importance of promoting coal and clean coal technologies.  He spoke about the need for an aggressive, balanced energy policy for Kentucky with emphasis on coal promotion.


Representative Adkins congratulated Ms. Williams on her new position and stated that the committee looks forward to working with her and the entire PSC staff in the future.


Representative Buckingham asked Ms. O'Donnell if there is a cabinet level agency for energy in Illinois and Missouri.  She replied that both states have a counterpart to the PSC, and they are under the supervision of larger cabinets.  She stated that in Illinois there is a division in the natural resources cabinet specifically for coal promotion and coal issues.


The committee then opened the public hearing for the fiscal year 2005 Low Income Home Energy Assistance Program (LIHEAP) block grant application.  Ms. Karen Doyle and Ms. Roseanne Barkley of the Division of Family Support, and Ms. Vicki Jozefowicz of the Kentucky Association for Community Action briefly explained the program.  Representative Adams asked if there is a backlog in application processing for weatherization.  Ms. Jozefowicz stated she is not aware of a backlog.  Representative Yonts moved to approve the application.  Second by Representative Bruce.  Motion carried by voice vote.


Finally, members discussed issues that could be investigated during the 2004 interim.  Representative Adkins suggested that the committee look at the Illinois coal incentive program, new clean coal technologies and their usage, and natural gas peaking plant utilization. Representative Pullin stated she would like to study clean coal technologies and coal promotion and see if legislation could be developed.  She also stated she would like for Truequote, which carries out energy arbitrage in Louisville, to testify before the committee.  Representative Buckingham suggested hearing testimony from Dr. Richard Schmidt of the Energy Consortium.  Representative Nesler suggested investigating biodiesel and ethanol further and working in cooperation with the Corn Growers Association to work towards possible legislation.  He also suggested investigating gasoline prices and uniformity in pricing.  Representative Yonts suggested having the manager of the new Hopkinsville ethanol plant testify as to their goals and how the project came about.


Representative Pullin asked for a moment of silence in remembrance of Senator Paul Herron who recently passed away.  She asked that the committee send a resolution to Senator Herron's spouse expressing the subcommittee's deepest sympathies.


Being no further business, the meeting was adjourned at 10:55 a.m.


All meeting materials and a tape of the meeting are available in the Legislative Research Commission library.