Special Subcommittee on Energy


Minutes of the<MeetNo1> 1st Meeting

of the 2011 Interim


<MeetMDY1> June 22, 2011


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Special Subcommittee on Energy was held on<Day> Wednesday,<MeetMDY2> June 22, 2011, at<MeetTime> 10:30 AM, at the Boone County Campus of Gateway Community and Technical College<Room>. Senator Brandon Smith, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Brandon Smith, Chair; Senators Ernie Harris, Ray S. Jones II, Katie Kratz Stine, Johnny Ray Turner, and Robin L. Webb; Representatives Royce W. Adams, Dwight D. Butler, Leslie Combs, Tim Couch, Will Coursey, Jim Gooch Jr., Wade Hurt, Sannie Overly, Tom Riner, Kevin Sinnette, John Will Stacy, Fitz Steele, and Brent Yonts.


Guests: Representative Addia Wuchner; Senator John Schickel; Steve Stevens, President, Northern Kentucky Chamber of Commerce; Dr. Ed Hughes, President, Gateway Community and Technical College; Cabinet for Health and Family Services representatives Virginia Carrington, Branch Manager, Division of Family Support, and Elizabeth W. Caywood, Policy Analyst, Department for Community Based Services; Dan McKenzie, Energy Program Director, Community Action of Kentucky; Jack Burgess, Director of Coal Facilities and Origin Sales, CSX Transportation; Russ Rogers, President, Transkentucky Transportation Railroad, Inc., and Mr. John Stevenson, private citizen.


LRC Staff: D. Todd Littlefield, Stefan Kasacavage, and Susan Spoonamore, Committee Assistant.


Discussion of Low Income Home Energy Assistance Program (LIHEAP) Block Grant Application for SFY 2012

Virginia Carrington and Elizabeth W. Caywood from the Cabinet for Health and Family Services and Dan McKenzie from Community Action of Kentucky gave testimony on the LIHEAP program.


Ms. Carrington and Ms. Caywood discussed the allocation of funds, LIHEAP eligibility and application requirements, and subsidy and emergency components of the program.


Mr. McKenzie explained that Community Action of Kentucky services all of Kentucky’s 120 counties. Community Action has assisted 700,000 households with residential heating, weatherization, and other cost-effective energy related home repair.


In response to Representative Adams’s question, Mr. McKenzie said that he would like to meet with Representative Adams to discuss safety concerns with propane consumers being forced to transport their own propane because it is not economically viable to commercially transport it to low-volume users. He stated that more flexibility in the subsidy component of the program may be needed to allow for paying for the cost of the commercial transportation of propane to reduce this safety risk.



In response to Representative Gooch and Senator Webb’s concerns, Mr. McKenzie stated that the agency is trying to educate the applicants on weatherization and offer budget counseling.


Mr. John Stevenson, concerned citizen, asked for more flexibility within the program. He had been to Community Action requesting help, but was told that he did not meet the eligibility requirements because his income was $150 over the maximum.


In response to Representative Wuchner’s question, Mr. McKenzie stated that home energy audits are done by certified energy auditors.


Representative Adams mentioned that the stimulus funds, which were made available to the Kentucky Housing Corporation, were used for weatherization.


Representative Couch asked for a report from the Kentucky Housing Corporation on the amount spent in each county for weatherization.


The proposed Findings of Fact for the LIHEAP Block Grant Application were approved, without objection, upon motion made by Representative Yonts, and seconded by Representative Combs.


Rail: A Vital Link in Transporting Kentucky Coal

            Jack Burgess, Director of Coal Facilities and Origin Sales, CSX Transportation, explained why eastern Kentucky coal is so important to the region and what CSX is doing to best support the eastern Kentucky coal industry. He also discussed the challenges and opportunities for eastern Kentucky coal with respect to transportation. The main challenges for eastern Kentucky coal are the mining and environmental regulations being imposed at the federal level. It is important that the citizens of Kentucky, and not outsiders, define what is best for Kentucky. Kentucky has done a good job of encouraging eastern Kentucky coal though House Bill 3. He asked that Kentucky consider the inclusion of Class I railroads in the Maintenance Credit and suggested that raising the $1 million cap on the Fossil Energy Expansion Credit would boost economic activity. Also, legislation supporting favorable capital loan requirements would be helpful.


            In response to Senator Stine’s question, Mr. Burgess said that much of West Virginia’s coal is exported.


In response to Representative Stacy’s question, Mr. Burgess stated that a big competitive barrier for Kentucky coal in the export market is the longer distance it takes to move coal from eastern Kentucky than from West Virginia.


In response to Senator Harris’s question, Mr. Burgess stated that there is a difference between steam coal and metallurgical coal. He was not sure about the economics of shipping coal off the east coast and through the Panama Canal to reach Asian markets.


In response to Representative Riner’s question, Mr. Burgess stated that the government is working on security technologies to monitor the rail transport of coal.


In response to Senator Stine’s question, Mr. Burgess stated that Kentucky has some metallurgical coal. Kentucky coal cannot be shipped west due to the lack of infrastructure and cost.


There being no further business, the meeting was adjourned.