As the expiration of a moratorium on new electric power plant construction approaches, the Kentucky Legislature has passed legislation to regulate new power plant siting.

The legislation forbids the construction of any merchant electric generating facility (excluding qualifying cogeneration facilities) or nonregulated electric transmission line without first obtaining a construction certificate from the newly created "Kentucky State Board on Electric Generation and Transmission Siting" ("Board"). The Board functions alongside the existing Public Services Commission ("Commission"), and three of its seven members are required to be members of the Commission. The Board is "attached" to the Commission for administrative purposes, and shares the Commission’s administrative staff. The Board is also to include ad hoc representation from the county in which the facility is proposed to be located.

In reviewing applications for a construction certificate for merchant electric generating facilities, the Board is required to consider such factors as the proposed facility’s impact on scenic surroundings, anticipated noise levels, regional economic impact, whether the facility will meet all local planning and zoning requirements, and whether the additional load imposed on the electric transmission system will adversely affect reliability. Any issued certificate will be conditioned upon obtaining any necessary air, water and waste permits.

With respect to applications for a construction certificate for nonregulated electric transmission lines, before granting a certificate the Board must determine that the proposed route will "minimize significant adverse impact on the scenic assets of Kentucky," and that "the applicant will construct and maintain the line according to all applicable legal requirements."

In addition, with the exception of certain "grandfathered" facilities, the legislation provides that no person may construct a new electric generating facility without first submitting a "cumulative environmental assessment" to the Natural Resources and Environmental Protection Cabinet ("Cabinet"). The assessment must include a description and analysis of the types and quantities of air pollution, water pollution and waste that the facility will generate, and a description of the source and volume of water withdrawal needed to support the facility. The Cabinet may impose restrictions on any resulting permit to ensure that the facility meets applicable standards. The legislation does not state whether the requirement for a "cumulative" environmental assessment would involve an assessment of the proposed facility’s cumulative impact with that of other existing or proposed facilities. (See Stateline, February 2002, "Virginia State Corporation Commission (SCC) Considers the Cumulative Environmental Impact of Proposed Generating Facilities").

Citing the need to allow the regulatory agencies sufficient time to revise administrative regulations before the expiration of the current moratorium on the issuance of permits for new electric generating facilities, the legislation includes a declaration that an "emergency" exists, and that the legislation will therefore take effect immediately upon approval by the Governor, or upon otherwise becoming law. The legislation is currently awaiting the Governor’s signature.