Friday, September 8, 2017


Commonwealth of Kentucky
Senate Majority Office

September 8, 2017
Contact: John Cox


FRANKFORT, Ky. (Friday, September 8, 2017) – The Kentucky Senate Majority Caucus announced Friday that Senator Jimmy Higdon (R-Lebanon) has been chosen by his peers to serve as the new President Pro Tempore in the Kentucky Senate. Senator Higdon replaces Senator David Givens (R-Greensburg) who resigned from his seat in Senate leadership in June citing personal reasons.

"I was sad to see Senator Givens step down, but I am honored to serve in this new capacity in Senate leadership, and I appreciate all of my colleagues for granting me this special opportunity," Senator Higdon said Friday. "I certainly have some big shoes to fill, but Senator Givens has been supportive, and I know he will continue to be a great asset to our caucus and a great resource to me moving forward."

Prior to Friday's election, Senator Higdon held the leadership position of Senate Majority Caucus Whip. A special election will be held in the near future to fill the newly vacant leadership post.

"I am happy for my good friend, Senator Jimmy Higdon, and look forward to continuing to serve with him in Senate leadership," Senate President Robert Stivers (R-Manchester) said. "Senator Higdon is experienced, knowledgeable, and possesses the necessary character skills needed to effectively serve as President Pro Tem, and I am confident he will do an exemplary job."

Senator Higdon was elected to the Kentucky Senate in 2009 during a special election after having previously served in the Kentucky House of Representatives since 2003. Senator Higdon was elected Majority Caucus Whip in 2014 and reelected in 2016. He represents the 14th Senate District, which encompasses Casey, Marion, Nelson, and Spencer counties, as well as a portion of Jefferson County.

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Monday, August 28, 2017

KY Public Pension Audit

The Public Pension Oversight Board (PPOB) met this afternoon in Frankfort.  Today's meeting was highly anticipated, with PPOB consultants presenting the third and final report outlining recommended changes to Kentucky's public pension systems. The report includes recommendations on changes to benefits and actuarial assumptions, but very little information on how to fund the changes. Members of the Kentucky House of Representatives will meet on Tuesday for a private briefing on the report.  

We expect the recommendations will be used as a guide, as policymakers develop a proposal seeking reforms to the various public pension systems.  Following today's meeting, Speaker Hoover issued a press release indicating that he and his colleagues will be seeking public input and that the PFM report is only a recommendation on how to proceed. The Governor and legislative leaders have indicated over the past few weeks that the special session will be called sometime in October. 

PPOB Meeting Summary

John Chilton, State Budget Director, began the meeting by presenting an overview of the problems facing the pension systems and the Commonwealth's budget. Chilton outlined the work of the Consensus Forecasting Group and the anticipated shortfall in FY 19 of roughly $200M.  He also reminded the committee that in the previous PPOB meeting it was determined that Kentucky would need an additional $700M per year in order to fully fund the ARC (actuarially required contribution).

Chilton went on to explain that the state needs an additional $1Billion and outlined three options:
  1. Cut spending
  2. Increase taxes
  3. Adjust benefits
Chilton discussed how spending on pensions and Medicaid have increased the past several years, as spending in other state agencies and programs have declined.

If no changes are made, K-12 education will be cut by $510M per year, from the annual current appropriation of $3.024B. This is an area that has generally been held harmless during previous budget cuts.  According to Director Chilton, without pension reforms, protecting vital government spending, like the SEEK formula, won't be an option.

Chilton also spent some time discussing the unfunded liability and what that number actually is. After talking through several ways to arrive at that number, they have chosen to use assumptions and rates used for private, non-government plans.  In doing so, the unfunded pension liability is $64B.  It's often been said through this process that the liability is anywhere between $30B and $80B.  

Following Director Chilton's opening presentation. the consultants - PFM - presented the final report and recommended changes to Kentucky's Public Pension Systems.  You can view the full reporHERE.  

To summarize, PFM recommends the following changes, as stated in the report:

All future Kentucky state and local government employees would have access to a balanced set of retirement benefits providing positive income replacement levels, including:
  • Social Security participation (not now available to teachers and many local government public safety employees)
  • Additional defined contribution (401K style) plans with significant minimum employer contributions and additional employer match
  • Retiree health care coverage consistent with that provided to active employees
All current KY state and local government employees would have the value of their accrued benefits maintained and receive benefits for future service as good as or better than those available for future hires.
All retired KY former employees would receive at least the same benefit level they were guaranteed upon retirement and would see significant improvements to the funding of their benefits - strengthening the solvency of these vital commitments.
In addition, all Kentucky stakeholders would begin to see steady and meaningful restoration of fiscal stability to the Commonwealth's retirement systems, with greatly reduced risk of renewed pension crises in the years ahead. In turn, this progress would ultimately lead to more resources available for critical investments and services, or fair employee raises going forward, and for improved financial health and credit strength 

Additional resources/slides from today's meeting:

Please don't hesitate to contact Rachel Bayens or Dustin Miller with any questions or concerns that you have. We will continue to keep you updated with information on the likelihood and timing of a special session.

Wednesday, April 26, 2017

Interim Calendar Released

The Legislative Research Commission released the 2017 Interim Committee Schedule calendar today and is attached or can be viewed HERE. The Interim Session begins June 1 and runs until December. The Interim Session is a time when House and Senate committees meet jointly to take testimony on issues for the upcoming session as well as get updates on bills that have recently passed. No formal action on bills is taken during the Interim, but it is a good time to educate legislators about issues in advance of the 2018 Session. Agendas for these meetings are generally announced in advance of these committee meetings and we will keep you informed on any issues of interest. 

Thursday, March 16, 2017

Bill Lists - March 15

From Government Strategies:

During the 2017 session of the General Assembly you can view the following bill lists updated nightly.

Education Bill List

Energy-Environment Bill List

General Business Bill List

Health Care Bill List

Health Insurance Bill List

Insurance Bill List

Transportation Bill List

Time For Recess - KY Legislative Update

The Kentucky General Assembly completed their 28th legislative day on Wednesday night, finalizing the bulk of its work for the 2017 Session. A few highlights on actions that took place the last two days:

- Charter Schools - House Bill 520 that would authorize charter schools was amended and approved in the Senate before the House approved those amendments and gave it final passage. The bill is now on the Governor's Desk. House Bill 471 that was amended to address funding for charter schools was approved in the Senate, concurred in by the House, and is now on the Governor's Desk.
- Education Reform - Senate Bill 1 that deals with standards review, aligned assessments and ESSA accountability passed out of the House with two floor amendments dealing with arts and advanced learners and those await final action in the Senate.
- Education Bills - Two other priority education bills received final passage and were delivered to the Governor: SB 107 (university board appointments) & SB 153 (postsecondary performance funding).
- Criminal Justice Reform - SB 120, a priority bill for this session that combines criminal justice reform and workforce development in the form of inmate re-entry, had minor amendments added before it passed the House. It will need Senate concurrence of those amendments.
- Nuclear Energy - SB 11, legislation that has been filed for many years finally passed both Chambers and has been sent to the Governor.  SB 11 lifts the moratorium on construction of nuclear power plants.
- Overweight Trucks - HB 184, sponsored by Rep. Suzanne Miles, is legislation to allow for the trucking transport of "metal commodities" which includes aluminum, to exceed current weight limits. The Senate Transportation committee approved a compromise on the legislation that was passed by the Senate and the House.

There were a few items of unfinished business that may be considered on the session's final two days March 29 & 30.

Wednesday, March 15, 2017

Ohio's restructured electricity market has cost households at least $1 billion

Ohio's restructured electricity market has cost households at least $1 billion since 2009, according to a new study by The Ohio State University's John Glenn College of Public Affairs. 
The report co-authored by Professor Noah Dormady, Glenn College doctoral student Zhongnan Jiang and Matthew Hoyt, an economic analyst at Exeter Associates finds that households in Ohio have never seen the benefits of competition, but have instead been forced to subsidize the losses of an aging coal fleet through a system of inflated riders and surcharges on their home electricity bills.

“Our findings stand in stark contrast to the competing analyses that have found mixed or favorable effects associated with retail restructuring,” said Dormady.   “We believe that much of this is due to the fact that the retail restructuring design of SB 221 created a perverse system by which commission intervention distorted true market-basis pricing…In essence, true retail deregulation never occurred in Ohio—and while wholesale prices declined, retail customers generally saw increasing total bills due to the regulated portion of their bill, that is riders and surcharges.”

To help reduce the incentives for utilities to inflate electricity costs to households and allow them to experience the intended benefits of competition the study provides important recommendations for correcting Ohio’s restructuring problems. Under the current system, customers have been overpaying for generation. They have been paying for generation through their energy costs, and they have been paying for generation through riders and surcharges on their monthly bills.

To read the full report go to For more information contact Dr. Noah Dormady at 614-688-1668 or email him

Bill Lists - March 14

From Government Strategies:

During the 2017 session of the General Assembly you can view the following bill lists updated nightly.

Education Bill List

Energy-Environment Bill List

General Business Bill List

Health Care Bill List

Health Insurance Bill List

Insurance Bill List

Transportation Bill List

Monday, March 13, 2017

Kentucky joint action agency adding renewables

Kentucky joint action agency adding renewables
Platts Megawatt Daily
March 13, 2017

A Kentucky joint action agency formed less than two years ago is looking to build upon its roughly 300-MW generation portfolio by adding 50 MW of renewable energy to the mix by the time a longstanding wholesale power arrangement with Kentucky Utilities ends in May 2019.

So far, the 10-city Kentucky Municipal Energy Agency has signed power purchase agreements for
mostly coal-fired generation with Big Rivers Electric, Dynegy and the Paducah Power System.

The Dynegy power will come from the Houston-based merchant generator's 1,100-MW Joppa baseload plant in far southern Illinois. Joppa was one of five power plants totaling 4,100 MW acquired by
Dynegy from St. Louis-based Ameren in 2013, as part of the latter's exit from the competitive power business.

Terry Naulty, KyMEA's treasurer who doubles as general manager of Owensboro Municipal Utilities, said in a Friday interview the joint action agency hopes to use wind or solar energy to balance out its heavy fossil fuels portfolio.

Member cities "want to evaluate whether or not there's a cost effective way to integrate renewables into the supply portolio," he said.

KyMEA issues RFP for renewables
To that end, KyMEA, in the heart of a traditional coal-producing state where coal still is used to generate more than 80% of its electricity, has released a formal request for proposals for 50 MW to 250 MW of renewables. However, it is likely to buy only 50 MW for now. The deadline to submit proposals is 2 pm ET on April 12. The solicitation seeks renewable capacity and energy resources for as long as 20 years.

In addition to Owensboro, the commonwealth's third-largest city behind Louisville and Lexington, KyMEA members include the cities of Barbourville, Bardwell, Benham, Corbin, Falmouth, Frankfort, Madisonville, Paris and Providence. With the exception of Owensboro, all are full-requirements members of the group.

The cities agreed several years ago to terminate the KU contract after the parties were unable to reach an agreement on an extension. KU, the state's largest electric utility, is a sister utility to Louisville Gas
& Electric, and both are owned by Pennsylvania's PPL. For now at least, Owensboro is a self-supporting member, operating the 425-MW Elmer Smith coal-fired generating station.

OMU's board of directors is expected to decide on Tuesday whether to keep running Smith as a coal plant for longer than the next two years. One of the plant's two units already is ticketed for retirement following the summer of 2019.

Sierra Club wants coal burning to stop
The muni is considering several options, including closing the second unit in 2022 or 2023, constructing gas-fired generation or adding renewables.

The Sierra Club is pushing the city to halt coal burning altogether at Smith by early next decade and use renewables to replace it. "We've got to help convince them it would be a financially wise thing to do," Aloma Dew, a Sierra Club member from Owensboro, said in a Friday interview.

But, "I don't feel real optimistic," she acknowledged. "Right now, gas is so cheap and they think it's going to be that way forever." That kind of thinking is not good for the state, she said. "Kentucky gets left behind on a lot of things because we're so hesitant to change."

Dew, nevertheless, applauded KyMEA's decision to incorporate more renewables in its portfolio.

Naulty said he does not know what the OMU board will decide on Smith.

KyMEA's business model, meanwhile, appears to be gaining popularity with other Kentucky cities and public power agencies. "We have been approached by several other public power entities to talk about synergies with KyMEA," he said, adding no final agreements have been reached.

— Bob Matyi

Monday, February 27, 2017

Support SB 214: Needed to Address Unfair Renewable Energy Subsidy

Senate Bill 214  amends Kentucky’s net metering laws to accomplish three things:
1. Increase net metering cap from 30 kilowatts to 1000 kilowatts
2. Grandfather existing customer generators
3. Change the allocation of costs among net-metering customers and all other customers to address an unfair cost shift relating to fixed costs to maintain the state’s collective grid.

What is Net Metering?
Net metering is a system under which privately-owned solar panels or other renewable energy generation is connected to a public-utility power grid and surplus power is transferred onto the grid, allowing customers to offset the cost of power drawn from the utility.

Why are these statutory changes needed?
- Under Kentucky’s existing net-metering law, all utility customers are subsidizing net metering customers.
- Current net-metering law requires host utilities to overpay for excess energy from the private net-metering facilities by crediting customer-generators at the “full retail rate” (cost of energy, plus costs to build and maintain the infrastructure to deliver the energy) for the excess energy they supply.
- The payment of the full retail rate by utilities to net-metering customer generators means that they avoid paying the costs all other utility consumers pay for the infrastructure of the electric grid.
- Kentucky’s electric utilities have been in discussions with supporters of net-metering for several years and have offered to help grow the industry (raise the cap from 30kW to 1 mW) and grandfather in existing customer-generators, in exchange for the opportunity to better align costs/eliminate a subsidy.

Impact of this Legislation
1. SB 214 would resolve the unfair subsidization of renewable energy by allowing electric utilities to utilize the ratemaking process at the Public Service Commission to more fairly allocate system costs between net-metering customers and all other customers.
2. SB 214 will not impact the approximately 500 existing customer-generators, as they are grandfathered under the bill and not affected by any proposed change in the allocation of system costs to be considered by the PSC.
3. SB 214 will positively impact economic development efforts by making possible larger renewable energy projects for large commercial and industrial customers who require access to renewable power as part of their corporate mandates or site selection criteria.
4. SB 214 does not apply to TVA or Kentucky electric utilities not regulated by the PSC.
Who Supports SB 214 ?
Kentucky’s Electric Utilities regulated by the PSC
Kentucky Association of Manufacturers
Kentucky Chamber of Commerce
Consumer Energy Alliance

VOTE YES on SB 214!

Monday, February 6, 2017

General Assembly Set to Return

The Kentucky General Assembly will end their January recess and reconvene for "Part 2" of the 2017 Regular Session on Tuesday, February 7. After a productive first week that ran from January 3-7, the legislature will come back to Frankfort and begin work on their currently scheduled final 25 legislative days before adjourning on March 30. We say "currently scheduled" as there has been significant talk of the General Assembly "saving" five legislative days to accommodate a special session sometime later this year to address pension reform and tax reform.

After passing 7 key priority bills the first week of the session, we expect they will come in and get to work on several notable issues that lawmakers hope to accomplish this session, including:

- Medical Liability Reform;
- Enabling charter schools;
- Reforms to education standards, teacher evaluations, and school accountability systems;
- Higher education board governance; and
- Criminal Justice reforms.

The Governor will lay out his agenda during his State of the Commonwealth speech to a joint session of the General Assembly on the evening Wednesday, February 8. That is likely to coincide with the key priorities of the General Assembly.

All are predicting a packed agenda, but hopefully not the quick pace that was seen during the first week of the session in January. The top issues alone are enough for a 25 day session, but this doesn't account for the secondary and tertiary issues that will arise once legislators get back to town. We expect heavy bill filing this week and will keep you updated as new legislative proposals are introduced. In addition, we are expecting most legislative committees to meet this week to consider legislation some of which will see floor action by the end of the week. It may not be as fast paced as Week 1 of the session, but we do expect there will be a lot of legislative action this week.

Looking Ahead
The legislature will return on February 7 for the remaining 25 days of the regular session. Due to the addition of Saturday, January 7 as a legislative day, the session legislative calendar was amended and March 9, originally a legislative day, will now be a recess day. The amended legislative calendar and committee meeting schedule can be viewed online, but here are a few dates of interest:

February 7th - Regular Session convenes

February 8th - State of the Commonwealth Address by Governor Bevin

February 17th - Last day for new Senate bills

February 20th - Legislative Holiday (Presidents' Day)

February 21st - Last day for new House bills

March 16th - 27th - Veto Recess

March 29th & 30th - Final two legislative days before Sine Die Adjournment.

Tuesday, January 3, 2017

Bill Lists - January 3, 2017

From Government Strategies:

During the 2017 session of the General Assembly you can view the following bill lists updated nightly. We will still be providing our clients a legislative report with updated bill lists weekly. Look for those in your inbox starting next Monday. And of course we won't hesitate to reach out directly on an issue of interest to your organization.

Education Bill List

Energy-Environment Bill List

General Business Bill List

Health Care Bill List

Health Insurance Bill List

Insurance Bill List

Transportation Bill List

KY General Assembly Underway

The Kentucky General Assembly convened today to begin the 2017 legislative session. This year is a short, or 30-day session. The Legislature will convene for four days this week to formally organize, which includes electing leaders and appointing committee chairs and members. On Friday, the legislature will recess until February 7th when they will reconvene to begin the working portion of the session.

Today also marks the first time in nearly one hundred years that the House will elect a Republican Speaker of the House. With a margin of 64-36, House Republicans have a supermajority and will officially take reign as the majority party when they convene at Noon.

Leadership & Organization
The Majority Party in the Senate and House have each already announced their leaders for this session and we have reported on that, but we have not shared the Minority Party Leadership for each chamber. Those leaders are:

Senate Democrat Leadership
- Sen. Ray Jones (D-Pikeville) - Re-elected as Minority Floor Leader
- Sen. Julian Carroll (D-Frankfort) - Re-elected as Minority Whip
- Sen. Dorsey Ridley (D-Henderson) - Elected as Minority Caucus Chair replacing Sen. Neal.

House Democrat Leadership
- Rep. Rocky Adkins (D-Sandy Hook) - Elected as Minority Floor Leader
- Rep. Wilson Stone (D-Scottsville) - Elected as Minority Whip
- Rep. Dennis Keene (D-Wilder) - Elected as Minority Caucus Chair

A full roster of committee members is not available as of this email, but we will share as soon as it is available. 

We will send weekly legislative reports and bill tracking updates beginning Monday, January 9th and will update you as needed during the January recess period.  

Looking Ahead

The session legislative calendar and committee meeting schedule can be viewed online, but here are a few dates of interest:

February 7th - Working session convenes

February 10th - Last day for new bill requests

February 17th - Last day for new Senate bills

February 20th - Legislative Holiday (Presidents' Day)

February 21st - Last day for new House bills

March 10th and 13th - Legislative Holidays

March 14th and 15th - Concurrence Days

March 16th - 27th - Veto Recess

March 28th - Legislative Holiday

March 29th - Reconvene

March 30th - Sine Die

Stay tuned....