Climate and energy

Is this the fourth day of HSCEEF hearings on HB 2949? I believe so. First day was Chairman Myers briefing the committee on the bill that he introduced (Day 1); second day was Paul Genoa of NEI briefing committee on potential of nuclear energy (Day 2); third day was yesterday where six participants testified, including CEP and Kansas Natural Resources Council (KNRC) (Day 3); and today we have several more to testify, including Sierra Club. A reminder: This bill, titled the Kansas Energy Plan Act, proposes to decide the future of Kansas energy for the next twenty years by focusing on baseload as represented by nuclear and coal energy.

Yesterday we had brilliant turn-out by constituents at the hearing – the room and hallway was overflowing. Folks: Your presence was definitely, definitely noted. People are still talking about it. Thank you.

What was also interesting about yesterday is that (1) no clear champions of the bill emerged, and (2) environmental organizations, utilities, and the KCC all urged great caution and a careful, long-term planning process when it came to the future of Kansas energy. FYI: this is kind of like cats, dogs, and gerbils all traveling to the vet together in one animal carrier and having no drama occur.

I’m sorry. It’s only Wednesday and my metaphors have already run dry.

Originally, additional HSCEEF meetings were scheduled on Thursday and Friday as well. I received an email late yesterday afternoon, however, saying those had been canceled. The committee will now meet on Monday, March 17 at 1:30 p.m. in 784 Docking.

OK. Here we go. We await the committee. Members of the committee include: Rardin, Faust-Goudeau, Light, Olson, Myers, Flora, Watkins, Proehl, and Whitham.

Hit your refresh button occasionally to check in – the hearing starts at 1:30 p.m. From the list I have now, we will hear the following testimony (in unknown order): Colin Hansen (KS Municipal Utilities), Joe Spease (Pristine Power), Tom Thompson (Sierra Club), Ray Dean, Empire Electric, Larry Berg (Midwest Energy). Repeatedly, I am hearing that there were people who wanted to testify, but who were told there wasn’t time or room on the docket.

We have some of the committee. Close to a quorum. Nice spring day out. I think most of us walked over aboveground, instead of thru the tunnel between the Capitol and Docking. No quorum, pretty decent audience (on normal days, this means 10-20 people. Big days are 20-25. Small days are under 10). We wait.

Chairman Myers notes that he does not normally start meetings late, but he doesn’t have a quorum. Joking, he asks for volunteers. Laughter. Tom Thompson notes there are no hands. Laughter.

We wait. Chatter. Talk. Idle conversation. It gets idler. And idler.

Sigh.

Chairman Myers gives up on his quorum and starts anyway.

Wes Ashton, Aquila

As proponent. Here on behalf of Aquila and ONEOK (I think). Again, congrats to committee for attempting state policy for elecricity generation in KS. A good direction. We are in favor of this bill for state policy. However, there is ome small tweak – in section 5, where you detail specifics for generation and targets for 2028 etc. You eliminate natural gas. We think natural gas should stay in there. You say “negigible” use of natural gas. This will cause challenges for utlities.

We have heard lots – that there is not one answer or fix for KS energy problems. We need to keep options on the table. Why take gas off table so soon? Natural gas has been part of KS policy for decades, and it rises and falls. As prices stand today, natural gas costs more than coal. However, that might not be true in the future, especiually with supply fluctuations, etc. Keep gas on the table. Do not limit options for long-term policy. Our legislature, state, citizens, KCC, etc., will work together in future to determine best baseload options.

To set policy for 20 years out – think back to 20 years ago. It would have been hard to predict where we are now. We need to remain flexible.

Strike the word “negligible” from references to gas in the legislation. Put gas in with coal as part of that mix. Also, some of this should be at the utility’s discretion.

Rardin – do you have any data or information that leads you to validate the 60% 40% numbers in this mix? Or are you just leaving those alone and just focusing on your concern?

Ashton – I am just keeping natural gas as an option. Not messing with the other numbers.

Flora – what percentage of residental homes are heated with natural gas

Ashton – has to ask other people in room. No one knows. They will have to look it up.

Flora – is gas larger than electric?

Ashton – probably. two to one, maybe

Flora – and numbers for commercial figures. that would be good.

Colin Hansen – KS Municipal Utilities

Testifying as neutral. They serve 235,000 custmers, 17% of KS citizens. Diverse membership, lots of different public power systems in KS. Differences in size and locations. Anywhere between 65,000 to 23 meters. Only their largest systems owns thier own baseload systems. The rest are wholesale power consumers. They do indeed have worries about availability of baseload in KS. 63 municipal electric companies own their own power plant, usually very small natural gas and diesel peaking units. There for capacity on peak day when load needs to be shaved to lower overall cost of electricity to their community. They also provide lots of reliablity, like in the ice storm this winter.

HB 2949 – yes, there needs to be an energy plan. More energy efficiency, renewable energy, better transmission, plus baseload. Some of our members are also buying limited amounts of wind. some rely on hydropower coming in from Westrn Power Admin, etc.

Need for baseload power is very real. Our members rely on purchase power agreements, but we are constrained by transmission and lack of capital. Hard for us to get access to resources.

These fuel standards in this legsilation are worrisome for smaller municipal utilities. These should be goals, not mandates, these are uncertain times, we need flexibility. Also, renewables and energy efficiency very important part of planning period.

Larry Berg, Midwest Energy

Reiterates previous conferees, most of them. Midwest serves 90,000 customers. We lack baseload energy, we are committed to diversified energy portfolio, and we have some thoughts on HB 2949. Midwest is about to lose lots of contracts that have kept their prices okay for past 20 years. Midwest just invested in 25 MW from Smoky Hill Wind farm, which is about 8% of total peak. Will also get an addition of 24 MW from later phase of Smoky Hill. That will be 16% of peak load, higher percentage than any company in state.

We have lots of trouble procuring baseload. We did have letter of agreement for new Sunflower plant. We may be forced to purchase baseload for our customers at higher rates, since we wil have to go out of state.

On this bill – page 2, lines 23/24 – setting up a preferred fuel mix and a market-driven solution – that’s contradictory. And these percentages need to be approximate goals or targets, not mandates.

Whitney Damron, Empire Electric

Their generation portfolio has a lot of natural gas in it, also 150 MW of wind with more coming on line soon. Some more coal coming on line. Also has lots of demand management programs/ energy efficiency coming on line. Empire also has its own planning process for meeting future demand, that looks at environmental concerns and future carbon costs. Nuclear is not part of the planning process because of the high costs and the problems with waste disposal. Also Empire isn’t big enough to build nuclear by themselves. They might keep an eye on coal for when IGCC technologies come on line.

Neutral on this bill. Technology and regulatory environment will change, and utilities will need help figuring out fuel mix when the change occurs.

Whitham, for Whitney Damron -what size coal power plant being built at Iatan Two? or Plum Point?

Damron – don’t know. He will find out.

Whitham explains how lots of contracts are coming due and power companies are having to get power from different surces.

Rardin for Colin – what is potential within your membership for energy efficiency?

Colin – lots of potential, frankly. BPU is a good example. Lots of low hanging fruit out there among our smaller members. We want them to deliver programs.

Rardin – can you quantify that in terms of megawatts?

Colin – I can’t. But some exmaples of programs are weatherixation, also appliances like cooling and heating – could be very successsful – like a heat pump program

Flora for Larry Berg – does Westar charge different rates to your co-op depending on time of demand – peak demand?

Berg – I don’t hink so. I can check. There may be an energy cost adjustment depending on their cost of fuel. I can check.

Flora – please do. I also understand Midwest is doing some energy efficiency measures, please discuss.

Berg – yes, for years, we have certified energy auditors… we are also a member-owned co-op, so we do all we can for members, we are not beholden to investors. Our auditors do infrared scans, blower door tests – we also have the HouseSmart program that targets rental properties where landlords are not incented to do anything to property – we have a custmer call us and we do free eneergy audit, ID areas in home where we can save customer money, tell them what we can do, finance it, and put it on their bill spread over 12 months. The repayment of the debt is not tied to the custimer. When next renter moves in, that renter assumes repayment.

Flora – have you tracked how effective this is, how the homes are improved?

Berg – we have about 300, I don’t know what savings are so far, but I can find out. this is a pilot project in four counties, largest Hays and smallest is Oakley. We think the project will last a couple of years.

Flora – and Midwest supplies capital for improvements – do you chjarge interest?

Berg – I think 5% or so.

Flora – I have a friend in Quinter who has solar generator and he pays avoided cost of fuel. Does his cost fluctuate depending on demand time, and does he always get the level price?

BErg – that’s an average over the year.

Flora – but his retail rate stays same all year long

Berg – yes.

Opposition testimony -

Tom Thompson, Sierra Club

I am saying what everyone else is saying, but I am coming out and saying don’t pass this bil. We do need a comprehensive energy plan, one that is reliable, sustainable, and environmntally appropriate. This just talks about baseload. This concerns Sierra Club, especially the increase in nuclear. This is being done without first getting it going on energy eficiency programs to reduce demand. KEC has commissioned SUmmit Blue to do a report on this. KCC has efficiency on docket. Wait for their findings. The targets in the bill need to make allowances for the future. Also, the fuel mix does not address wind, except at very low levels, apparently because it is not considered baseload. SInce it is not dispatchable, wind does not appear to be take seriously, and that concerns us. Energy planning needs to be broad, considering lifetime costs, impat on health and environment, and energy independence – and the public needs adequate input. Do not pass this bill.

Joe Spease, Pristine Power

this bill is wrong for KS – at a time when most of world is looking to develop renewables, this bill encourages more nuclear and fossil fuels. It wants to loosen restrictions on these sources, and it doesn’t encourage energy efficiency. We need to work on firming wind power with hydrogen or compressed air storage. Don’t support failed “clean coal technologies” like Future Gen. Kansas needs a broader energy vision. This is not a good bill. Look ahead to renewbles not back toward fossil fuels.

Ray Dean, Professor Emeritus Kansas University

I want to advocate that wind and natural gas in combination – or wind in combination with energy storage – be considered as potential future baseload options. There seems to be a faulty assumption that nuclear and fossil fuels will last forever. My testimony also agrees with most of previous speakers, especially the proposed fuel mix. Instead I wold suggest that baseload be defined more like – as continuous production of reliable power at low costs, rather than in terms of specific technologies. Many years ago, people thought gas combined cycle was a good baseload option. They don’t think that now because of rising gas prices. Baseload changes to intermediate load. When times and situations change, definitions need to change. There is another way to obtain continuous production of reliable power at low costs, by combining wind and gas. This mixes renewable into baseload. Perhaps when gas prices continue to rise, you could even add in compressed air energy storage (CAES) – this cuts natural gas consumption considerably. Additionally, you could store heat in addition to compression below ground, and eventually eliminate gas entirely. Then you are free of dependence on gas prices. Associating gas with wind eliminates wind’s intermittency, making it dispatchable as coal or nuclear. Also, dispersed generation is more reliable, and can respond quickly. So, the is definition of baseload in this bill needs to not exclude the options of mixing in renewables – wind – in certain combinations. Wind can eventually better serve as baseload as the technologies better develop.

Also introduced various research and resources regarding the potential of wind, CAES, etc.

Myers – how many place in KS do we have large enough to store air, other than aroudn Hutchison?

Dean – KS is one of better areas in country. Salt mines around Hutch, salt domes, also in western parts of state. It has been done in Huntsdorf Germany, 290 MW facility built in 1978. Second facility in Alabama -

Myers – is it effective? Can you show me evidence?

Dean – I can get it, yes. I didn’t bring it here with me.

Myers – I remember from engineering school, you need heat to create pressure -

Dean – exactly (explains how CAES works)

Myers that sounds like a lot of energy to use and energy has to come from somewhere thank you.

Flora – you didn’t get to finish, Ray. Is there a place in IA?

Dean – yes, there is one being developed in IA. Several municipalities are building compressed air storage park to balance loads. That is 260MW, under development.

Flora – do you have info 0 it obviously take gas to do this, but can we get numbers on how much is used, how efficient the process overall.

Dean – the amount of gas required is about half as much as used in regular systems. Turbines do the compression, and wind does the (MH misses it)

Myers – I wold like to see efficiency figures, and kilowatt systems.

Dean – that is why I passed out these papers, they give you that information

Myers – if you were in decisionmaking position with utility, and in regulatory capacity – would you buy into that with your money?

Dean – good question. What I would do right now is do some studies, like they are doing now on carbon dequestration. Some of these aspects of sequestration are similar to compression storage for wind. Old aquifers, old oil and gas wells, good sites. I would develop pilot programs to figure out options for future. We need to do that, and get on with it.

Myers – thank you.

Rardin for Spease – regarding market-driven solutions (MH misses it) what can you tell us about possibly turning Wichita area into area of manufacture for wind materials, turbines, etc? An economic boon for the state?

Spease – good question. I’m a volunteer ambassador for that kind of thing. (Basically, Wichita a great place given resource of Boeing, etc.)

Rardin – this bill has such an emphasis on nuclear – could you explain why this is not a good emphasis?

Spease – two reasons (1) cost. which don’t include cost of enriched uranium and the insurance, that is all subsidized, and (2) health, the sheer volume of curies that go into the air.

Flora for Thompson – the Summit Blue study by Kansas Energy  Council, when wil that be done?

Thompsn – possibly June.

Flora – it looks at efficiency to help decrease baseload demand?

Thompson 0 yes I believe so. And there is a docket at KCC in March on energy efficiency.

Flora for Damron – what is your company doing to icnrease energy efficiency?

Damron – I don;t have specifics, but my testimony mentions several all our programs, lots of demand management programs, residential, commercial and industrial. I can get you info.

Flora – yes, I would like that.

Damron – also, through technology we just tracked down your answers – PLum Creek – 665 Mw, Iatan Two is 850 MW

Rardin – are there existing figures on energy efficiency potential in Kansas?

Thompson – not that I;m aware of

Myers – energy efficency is what everyone likes, but it won;t fix everything. It just slows down demand. We should all strive for it, And those who can afford energy probably won’t be efficienct. Our appliances use more nad more power. Like these flat screen TVs. Efficiency is great but it won’t solve the problem, Several times over past two days I have heard the word mandate re this bill. These are not mandates, they are goals. Bill is not meant to be a mandate on anybody, incuding utilities.

Written testimony – from Reed Nelson. No, it;s actually present, he;s here, whoops.

Reed Nelson, private citizen

Energy efficiency – I looked at Vermont and they have flattened their demand (MH – this is how, Efficiency VT), the Salina Journal has a story on that. TX is following that path. ratepayers bills are going down as well. This is an important direction that this committee definitely needs to consider.

Myers – we are doing a lot of that in kansas, too. Meeting adjourned.

Rardin – wait. When do we meet again -

Myers – next Monday and Tuesday.

— Maril Hazlett, www.climateandenergy.org