Kentucky Coal Education

In this project, Contractor will estimate the likely effects of increased electricity prices due to energy-related environmental policies such as changes in the .implementation of the Clean Air Act, greenhouse gas emissions regulations or legislation, or renewable portfolio standards (RPS) on Kentucky's industrial sector. Contractor will pay particular attention to the effects on employment and on the Gross State Product (GSP) due to changes in the most energy intensive components of our industrial economy. This process involves two steps. The first is to identify the immediate, or the short-run, effects of electricity price increases on employment and production (i.e. output) in the energy intensive industrial sector. In order to assess the likely change in elasticity in the long run, Contractor proposes to adapt previous models on long-run effects on energy price increases and adapt them for the policy scenarios under consideration in this analysis. Specifically, Contractor will study effects of changes in electricity prices in Kentucky and surrounding states. The project will be divided into three parts, with one deliverable for each part. The first part will develop the scenarios for analysis and will complete the literature searches for the short-run and the long-run analyses. The deliverable for this part will be a memo summarizing the findings concerning the scenarios and the literature review. In the second part of the project, Contractor will estimate the short-run effects ofthe proposed scenarios. Again, the deliverable for this part will be a memo summarizing the short-run effects. In the third and final part of the analysis, Contractor will conduct the long-run analysis. The third deliverable is a final report that will contain the results from all analyses.