Long Reliant On Coal, Even The South Is Reflecting Nationwide Shift Away

Jul 13, 2016

Credit Erica Peterson

Even in what has historically been the country’s coal-fired stronghold, coal’s share of the electricity market is declining. The drop of coal-fired electricity generation in the Southeast — and a corresponding rise in natural gas and renewables — is reflecting what’s happening to the nation as a whole.

The Southern States Energy Board released its regional energy profile last week. The SSEB is an interstate compact made up of elected officials from 16 Southern states, as well as Puerto Rico and the U.S. Virgin Islands. Kentucky is part of the compact, as are neighboring states like Missouri, West Virginia and Tennessee.

“The states that have been predominantly coal in the past are seeing some of the same pressures [as the rest of the country],” said SSEB Senior Technical Analyst Gary Garrett.

“Coal-generating plants are getting older, natural gas prices are getting lower and are competing much more favorably with coal than they have in the past. There’s some pressure from renewable energy that’s coming online, and of course, environmental regulations have helped to increase the cost of producing electricity from coal, because of putting on additional pollution control equipment,” he said.

In 2015, coal produced 33 percent of the electricity in both the United States and the region covered by the SSEB. For the region, that represented a nearly 17 percent drop from the previous year.

Over the same period, natural gas generation in the SSEB states increased by more than 21 percent, and hydroelectric power and wind increased by 7.5 percent and 14.2 percent, respectively.

Coal still accounts for 87 percent of electricity generation in Kentucky; the only SSEB state that gets more electricity from coal is West Virginia, at 94 percent.

The report also found that 2015 electricity rates in SSEB states averaged about 9.23 cents per kilowatt hour — lower than the national average of 10.42 cents. But Garrett cautions low rates don’t always translate into lower bills for residents of the South.

“That can sometimes be a little bit of a political point that people make, and you can take it for what you will, but a lot of times people really do focus on what they pay for electricity in terms of their bill, rather than what they pay in terms of their rates,” he said.

High electricity usage — due in part to cold winters and hot summers — and homes that often lack basic energy efficiency measures help contribute to bills in SSEB states that are 13 percent higher than the national average.