Industries everywhere work hard to keep their costs down, but businesses in Kentucky have an advantage that is extremely powerful – electric power, that is.
The Bluegrass State’s electric power rates are consistently among the lowest in the nation. Industrial users pay, on average, 25 percent less than the U.S. average. Manufacturers such as Ford, mini-mill Gallatin Steel, the General Motors Corvette plant and others benefit from electric power rates that were the fourth-lowest in the nation in 2010. In fact, Kentucky’s rates are the lowest when compared with states east of the Mississippi River, according to the U.S. Department of Energy’s Energy Information Administration.
“Industrial electricity is cheaper than it was 20 years ago,” says Dennis Cannon, vice president of the Kentucky Association of Electric Cooperatives.
Low electric rates give businesses in Kentucky a huge cost advantage over their competitors in many other states. And when it comes to competing for job creation and new industrial investments, the advantage goes to Kentucky.
“If you’re looking for a site to locate a facility, you’re going to look at all of the factors. One of those is electric rates,” Cannon says.
Kentucky’s low rates are the result of good fortune and wise planning, he says. Because power generators have access to affordable and abundant supplies of Kentucky coal, it’s no surprise that about 90 percent of Kentucky’s electricity comes from that fossil fuel. In addition, state regulators have established electric rates that benefit power users and power producers.
“We’ve had a steady, conservative approach to regulation that has
led to steady, low electric rates,” Cannon says.
When industries are looking for a place to succeed and grow, it’s hard to miss Kentucky. After all, the state has left a light on for them.