For 50 years, Kentucky taxpayers have subsidized the use of coal (any coal, not just Kentucky coal) by the state's utilities.
Coal purchased to generate electricity is exempt from the state's 6-percent sales tax. Other fuels such as natural gas enjoy no such favor.
The sales-tax exemption for utilities buying coal will amount to about $86 million this year.
It's hard to assess all the effects of this tax policy. It's fair to say that it has contributed to both Kentucky's cheap electricity and over-dependence on a single, high-polluting energy source — one that will become more expensive as limits take effect on climate-changing carbon emissions.
To prepare for the expected limits on carbon, the Beshear administration wants to mandate that the state's utilities derive part of their electricity from biofuels produced from Kentucky crops and trees.
The U.S. House has passed a requirement that utilities derive 20 percent of their power from conservation and renewable energy by 2020. The renewable portfolio standard is part of the energy bill that's stuck in the Senate that would also cap carbon emissions and create a carbon trading system.
To read the complete editorial, visit The Lexington Herald-Leader.