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Committee approves bill barring utilities from passing plant demolition costs to ratepayers
Summary
House Bill 519, approved by the committee, would prohibit utilities from recovering demolition costs for retired fossil-fuel generation facilities through customer rates; sponsor argued ratepayers should not fund demolition that benefits utility owners.
The Committee on Natural Resources and Energy approved House Bill 519 on Monday, a measure that would bar utilities from passing the cost of demolishing retired generation plants — such as coal-fired units — onto ratepayers.
Sponsor Representative Chris Fugate told the committee that energy costs in parts of Kentucky have risen sharply in recent years and that many customers are struggling to pay bills. "The purpose of this bill... is if a company utility decides to tear down or go away from coal-fired generation or fossil fuel generation, then the cost of the demolition for those plants cannot be passed on to the ratepayers," Fugate said.
Fugate cited specific constituent examples of high electric bills, including a household bill of $693, another of $723 and an $613 bill for an 80‑year‑old on fixed income. He also referenced publicly reported company profits for large utilities, saying American Electric Power reported gross profit in the billions in recent years.
Representative Smith, who represents a rural co-op area, explained his affirmative vote by describing recent rate spikes and service-charge increases his constituents experienced during an extreme cold spell. He told the committee the committee should be prepared to hold utilities accountable and to seek answers for constituents.
No state cabinet witness took the floor in the committee record. The clerk called the roll; the committee recorded a majority of affirmative votes and the chair said the bill passed with a favorable recommendation to the full House.
If enacted, the bill would change how the Kentucky Public Service Commission treats certain utility-cost recovery requests by excluding demolition of generation facilities from pass-through recovery to ratepayers. The bill text directs the Public Service Commission to deny rate adjustments that would recover such demolition costs from customers.
Committee members and the sponsor said the committee will continue oversight of utility costs and the capacity outlook for the grid. The bill now advances to the House floor with a favorable recommendation from the committee.
