The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Sunday, May 27, 2001

Energy crisis may boost state

Recent developments on the energy front suggest that California's pain could be Kentucky's gain.

While California struggles with its own mini-energy crisis, brought on by a botched scheme of price controls and deregulation, Kentucky finds itself in the enviable position of being a low-cost supplier of electricity.

Power industry analysts believe the state will benefit significantly if the national process of utility deregulation proceeds as expected. With the advantage of relatively inexpensive natural resources and an excellent transportation system that includes navigable rivers, Kentucky utilities are well-positioned to generate low-cost electricity and sell it to customers in other states.

Power supply problems in some of the nation's urban centers also present opportunities for Kentucky's power industry.

During periods of peak demand this summer some cities in the Northeast may experience temporary blackouts of the sort that have plagued California for months. If this occurs, officials in the Northeast will be looking elsewhere to obtain power.

Californians traditionally haven't liked having power plants as neighbors, which accounts for the fact the state imports 20 percent of its electricity from other states.

By contrast, Kentucky is in the midst of a power-plant boom, with 18 new facilities in the works. If all the proposed electric plants are built, the state's electric generating capacity will increase by 50 percent.

At last it appears that Kentucky has gained an economic advantage over its neighbors.

Of course, it's unseemly to exult over the energy problems of other states. Nevertheless, we should welcome the opportunities created in the state as a whole and in western Kentucky in particular by the energy crisis.

The Purchase region could see at least three new power plants come on line in the next several years.

Duke Energy North America is planning to build a small natural gas-fired plant near Calvert City. This $200 million project will create hundreds of construction jobs and about 10 full-time jobs after the plant is completed.

A more promising possibility is the huge $1 billion gas-fired plant that a consortium made up of the United States Enrichment Corp., a Baltimore-based power company and a Japanese firm is bidding to build near the Paducah Gaseous Diffusion Plant.

The proposed plant would supply power to the Tennessee Valley Authority.

Also, a Lexington power company reportedly is considering building a "clean-coal" plant in western Kentucky. Possible locations for the plant include Ballard, Marshall and McCracken counties.

Bush administration officials say that it takes 1,500 construction workers to build the typical electric power plant and at least 200 full-time workers to run it once it opens.

Based on those estimates, it's quite possible that new power plants could create more than 500 permanent jobs in the Paducah area. Most of these jobs would offer salaries well above the average for the region.

It also needs noting that renewed interest in nuclear power may translate into badly needed domestic business for the USEC uranium enrichment facility. Unquestionably, the plant's long-term prospects look brighter than they did six months ago.

The same thing can be said of the economic outlook for western Kentucky. Although plant closings and layoffs have hit the area hard, the prospect of landing more than a handful of the 1,300-1,900 new power plants President Bush says the nation will need over the next 20 years offers encouragement for the future.

Power plants alone won't bring greater prosperity to the region. But low-cost electricity is rapidly becoming a very valuable resource one that can attract new industries and help ignite economic development on a broad scale.