Blog by: Aaron Withers
As Kentucky’s coal economy fades, a new generation of developers has ambitious plans for advanced nuclear facilities located on retired mine sites.[i] These plans include processing lithium and other critical minerals using coal-country infrastructure.[ii] This blog argues Kentucky should welcome that pivot with a focus on community-centered legal framework. This includes strict standards for siting and cleanup, binding commitments to local benefits, and clear accountability for the land long after the projects are complete.
Kentucky stands at a rare turning point. Federal incentives now give clear preference to energy projects built in so-called “energy communities,” a term that includes many of the state’s former coal regions.[iii] Those sites come with bonus tax credits for clean-energy developers willing to invest where coal once defined the economy.[iv] Eastern and Western Kentucky are prime areas for this energy transition.[v] The legal question is not whether to repurpose coal country, but how to do it without repeating the boom-and-bust and environmental harms of the past.
The Department of Energy’s recent guidance explains why retired coal plants are well suited for advanced nuclear development.[vi] Existing grid interconnections, water access, and skilled labor can shorten construction timelines and lower costs.[vii] The DOE’s modeling suggests converting a coal site to nuclear could add hundreds of permanent local jobs and generate hundreds of millions in annual regional economic activity.[viii] In 2024 and 2025, the Kentucky legislature created the Kentucky Nuclear Energy Development Authority (KNEDA) to identify suitable sites, train workers, and build nuclear-ready communities, signaling bipartisan momentum behind the state’s emerging nuclear sector.[ix]
Kentucky has also seen early efforts to process lithium and rare earth elements from coal waste and other legacy materials.[x] These ventures do not involve hard-rock mining and chart a different path for coal country by reusing industrial sites to meet growing demand for battery materials and other energy transition inputs.[xi] The story is appealing, but processing carries its own risks.[xii] Chemical hazards, waste streams, and environmental uncertainty are sure to come, and the law must be ready for them.[xiii]
Coal-to-anything development rests on legal ground that is both promising and fragile. Legacy pollution and land stability remain subject to the Surface Mining Control and Reclamation Act (SMRCA) and Kentucky’s primacy program, which require that any new construction align with ongoing reclamation obligations enforced by the Department for Natural Resources and overseen by the Office of Surface Mining Reclamation and Enforcement (OSMRE).[xiv] Building new facilities on contaminated or potentially contaminated land also carries liability risks under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).[xv] [MS1] The Environmental Protection Agency (EPA) has offered guidance and limited liability protections for energy projects on such properties, but those safeguards are far from absolute.[xvi] Developers and host counties must undertake thorough due diligence to negotiate indemnities, and plan for long-term monitoring and maintenance.
Federal funding programs now require “Community Benefits Plans,” but those plans are usually commitments made to the DOE, not enforceable promises to the people who live near the project.[xvii] A stronger model would tie state or local approvals to Community Benefit Agreements (CBA).[xviii] These are negotiated, binding contracts that can include local hiring goals, apprenticeship programs, public health monitoring, and property tax revenue sharing.[xix] Kentucky’s agencies and counties could make such agreements a standard condition for community consent, ensuring that labor, equity, and environmental safeguards are written directly into each project’s approval.
In 2024, Kentucky Governor Andy Beshear vetoed a nuclear-development bill, not out of opposition to nuclear energy, but because of concerns about who would control appointments to the new authority’s board.[xx] The episode underscored that the rush to build cannot come at the expense of basic governance norms. The following year, legislators approved additional funding and a grant program through the University of Kentucky to coordinate siting and workforce development.[xxi] That move showed how the state can encourage innovation while maintaining public accountability.
Kentucky should apply three legal guardrails to guide the industry in a way that keeps communities at the center. First, state incentives, local approvals, and industrial-revenue bonds should be conditioned on binding Community Benefits Agreements that include measurable commitments such as apprenticeship programs, prevailing wages, local procurement targets, environmental standards, and medical monitoring funds. Where the Department of Energy requires Community Benefits Plans, those same promises should be mirrored in state-law conditions so that residents have a private right to enforce them. Second, the state can use its Surface Mining Control and Reclamation Act primacy framework to coordinate reclamation with new construction. That approach would require environmental site assessments, and CERCLA-aware indemnities and financial assurances. The EPA’s liability guidance for projects on contaminated lands should also be incorporated by reference into permits and county development agreements. Third, the Inflation Reduction Act’s energy-community bonus offers major potential, but local governments should link tax abatements to long-term operating covenants and include clawback provisions if employment or production targets are missed once credit periods end. This approach would turn a short-term federal incentive into lasting local value rather than a fleeting construction boom.
Kentucky should repurpose coal country for advanced nuclear and battery-material industries, but it must do so within a legal framework that prevents companies from shifting costs onto the public and ensures that local communities share in the benefits. The state has already taken important steps toward nuclear readiness. It can complete the work by requiring enforceable Community Benefits Agreements for major projects, embedding SMCRA and CERCLA liability safeguards into all approvals, and using the Inflation Reduction Act’s energy-community status to secure long-term commitments. If Kentucky follows that path, it can turn its legacy assets into a lasting advantage and ensure that the energy transition finally rewards the communities that powered the last one.
[i] Ryan Van Velzer, Coal’s Dying Light: Kentucky’s Slow Walk Toward Renewable Energy, LPM News (July 21, 2023), https://www.lpm.org/news/2023-07-21/coals-dying-light-kentuckys-slow-walk-toward-renewable-energy [https://perma.cc/H9BT-W8WU].
[ii] Id.
[iii] Appalachia Regional Report: Building a Clean Energy and Industrial Economy and the Supporting Role of the U.S. Department of Energy’s Office of Fossil Energy and Carbon Management, U.S. Dep’t of Energy, Office of Fossil Energy & Carbon Mgmt., (Oct. 29, 2024), https://www.energy.gov/sites/default/files/2024-10/Applachia%20Report_10.29.24%20FINAL.pdf [https://perma.cc/SB4W-2L7X].
[iv] Id.
[v] Id.
[vi] Coal-to-Nuclear Transitions: An Information Guide, U.S. Dep’t of Energy, Office of Nuclear Energy, (May 2024), https://www.energy.gov/sites/default/files/2024-05/Coal-to-Nuclear%20Transitions%20An%20Information%20Guide.pdf [https://perma.cc/W9PY-Q94M].
[vii] Id.
[viii] Id.
[ix] Id.
[x] Supra note 2.
[xi] Thomas Ziemkiewicz et al., Could Coal Waste Be Used to Make Sustainable Batteries?, W. Va. Univ. Rsch. Inst. (Aug. 29, 2022), https://wvwri.wvu.edu/news/2022/08/29/could-coal-waste-be-used-to-make-sustainable-batteries [https://perma.cc/JSN9-Y4G7].
[xii] Toxic Coal Ash in Kentucky: Addressing Coal Plants’ Hazardous Legacy, Earthjustice (Sept. 2, 2025), https://earthjustice.org/feature/coal-ash-states/kentucky [https://perma.cc/F78Y-SMKA].
[xiii] Id.
[xiv] Surface Mining Control & Reclamation Act of 1977, 30 U.S.C. §§ 1201–1328 (2018).
[xv] Comprehensive Envtl. Response, Compensation & Liab. Act of 1980 (CERCLA), 42 U.S.C. §§ 9601–9675 (2018).
[xvi] Liability Reference Guide for Siting Renewable Energy on Contaminated Properties, EPA 4 (July 2014), https://www.epa.gov/sites/default/files/2014-07/documents/liability-renew-energy-contamprop-2014.pdf [https://perma.cc/923A-J3L8].
[xvii] Community Benefits, Reimagine Appalachia (visited Oct. 30, 2025), https://reimagineappalachia.org/community-benefits/ [https://perma.cc/3KD7-8ZGP].
[xviii] Id.
[xix] Id.
[xx] Bruce Schreiner, Ky. Governor Vetoes Nuclear-Energy Legislation Over Board Appointments, The Associated Press (Apr. 4, 2024), https://apnews.com/article/kentucky-governor-nuclear-energy-328e0ace8cf663dc26b44be382b1c085 [https://perma.cc/94ZS-E8N4].
[xxi] Bruce Schreiner, Kentucky Legislature Approves Creation of a Nuclear Energy Development Authority, The Associated Press (Apr. 12, 2024), https://apnews.com/article/kentucky-legislature-nuclear-energy-8b9274ed27cca6513e4514f8277f76e6 [https://perma.cc/R79Y-XFBU].