Climate and energy

One year after KDHE Secretary Bremby denied the air quality permit for Sunflower Electric’s proposal to build a 1,400 megawatt coal plant that would have emitted more than eleven million tons of the pollutant, fossil fuel carbon dioxide, into the Kansas air, it’s deja vu all over again.

Maybe. Kind of. As we all know, a lot - a lot - has changed in a year. The whole world has changed.

Will those changes affect the coal plant proposal?

Check out these two stories from Chris Green of Harris News. And you decide.

Coal plants stuck in limbo

TOPEKA — A year after the state’s top environmental regulator nixed the construction of two coal plants over global warming concerns, the future of that project remains up in the air.

But Sunflower Electric Power Corp. and its partners don’t fear that time is running out on the project as they pursue a legal challenge that could leave the fate of their Holcomb expansion in the hands of the Kansas Supreme Court sometime next year.

The Hays-based utility could also seek help again next year from the Legislature, despite failing to win enough support this past spring to override Gov. Kathleen Sebelius’ vetoes of legislation allowing the plants.

Earl Watkins, president and chief executive officer, said Sunflower still believes the project represents the best deal for its customers and has no absolute deadline by which it must win state regulatory approval.

“We always have hope,” Watkins said. “We’re not going to give up. We’re not going to quit on this project until our board of directors tells us that we have to.”

The largest investor in the plants, which would sent 85 percent of their power out of state, also remains on board. Tri-State Generation and Transmission Association of Colorado plans to purchase power from one of the project’s two 700-megawatt generators, should they be built.

Tri-State spokesman Lee Boughey said that although the cooperative is also examining building a new electric generation plant in western Colorado, it remains committed to Holcomb, too.

“We do not have a deadline of any kind we’ll continue to work through the appeals process and see where that takes us,” Boughey said.

But critics see a much shakier climate for coal-fired generators since Health and Environment Secretary Rod Bremby denied air-quality permits for Sunflower’s plants on Oct. 18, 2007.

Scott Allegrucci, treasurer of the Great Plains Alliance for Clean Energy, which opposed Sunflower’s project, said that while the plants could still be built, they’ll likely face a number of growing legion of problems.

He said that the $3.6 billion cost estimate for the Holcomb’s two 700-megawatt generators is about two years old, at a time when construction projects have faced drastically higher costs for fuel and construction materials such as steel and oil.

He noted that a Nevada utility recently concluded that the cost of building its 1,500-megawatt coal plant has grown from $3.8 billion to $5 billion over the past two years.

In addition, he also said that several major banks had deemed new coal-fired plants a risky investment, months in advance of a financial crisis that has put a squeeze on the amount of credit being extended.

There’s also the prospect of the federal government implementing a tax or limits on carbon emissions, which could also affect the cost of power coming from coal plants.

As a result, Allegrucci said it’s particularly surprising that Sunflower and its backers aren’t reevaluating whether building the coal plants still makes sense.

“I think in some ways, the thing that’s most stunning about this is that those supporters of the project are ramping up to do this all over again as if nothing’s changed,” Allegrucci said.

At a crossroads?

But Watkins expressed confidence in the project’s financing, noting that the banks loaning money to Sunflower haven’t been hurt by the same financial missteps casting a pall over Wall Street.

In addition, Watkins said falling commodity prices fueled by the economic downturn has made it more difficult to project whether Sunflower’s $3.6 billion cost estimate will prove high, low or on the money.

The company won’t know the costs for sure until it’s able to secure a permit and move forward with construction, he said. In addition, other forms of newly constructed power generation, such as wind power, would also become more expensive because of rising costs and coal power would remain far cheaper per kilowatt hour of electricity being produced.

He also said that concerns about the rising cost of coal were unfounded because the company would be importing its fuel from Wyoming, rather than far more expensive coal coming from mines in the eastern U.S.

Watkins also said that he doesn’t think carbon regulation at the federal level would affect Sunflower plants, which he said would be among the nation’s cleanest and most efficient coal plants.

He said the carbon tax would have to be set at an enormously high rate, one that would destroy the nation’s economy, to make coal a more expensive fuel than a fuel such as natural gas.

In addition, Watkins said he believes there’s a growing recognition among Kansans, hit hard by rising gasoline prices this year, of the need to support policies that ensure a reliable, affordable energy supply.

“The American public has awakened to the significance of that, and the Kansas public in particular,” Watkins said.

Yet Bruce Nilles, national coal campaign director for the Sierra Club, detects a growing sense among the American public that times to move beyond fossil fuels, which threaten to grow more expensive as worldwide demand rises.

He said that instead of building new coal plants, state lawmakers could focus their attention of further developing wind energy production. The amount of wind power being produced in the state is slated to grow this year from 364 megawatts to slightly more than 1,000 megawatts.

While critics of wind power tend to see it as too intermittent to be a viable alternative to coal, nuclear or gas plants, renewable energy backers tout its potential to grow from providing about 1 percent of the nation’s power to providing 20 percent over the next few decades.

“Kansas is really sort of at the crossroads,” Nilles said. “The question is are the Republican leaders in the Legislature going to continue to push coal … or are they going to step back and see what is truly in the best interest of Kansas.”

(Another monumental historical turning point, for the state of Kansas and thus the nation. GREAT. Because we needed another one of those.)

Plants expected to re-emerge as legislative issue

TOPEKA — The Legislature’s top two sitting Republican leaders say they want to resurrect efforts to clear the way for two coal plants in southwest Kansas during the next session.

A spokeswoman for Gov. Kathleen Sebelius, who successfully vetoed legislation allowing the plants this past spring, said the governor would be disappointed to see the issue consume more of lawmakers’ time during the 2009 session, which begins in January.

“Last session, legislative leaders hijacked what could have been a very production session — to the point that they sacrificed legitimate economic development initiatives,” Sebelius spokeswoman Nicole Corcoran said in an e-mail. “To go through all of that again, instead of addressing the needs of Kansans, is inexcusable.”

But Senate President Steve Morris, R-Hugoton, and House Speaker Melvin Neufeld, R-Ingalls, said a state regulator’s ruling that blocked the plants a year ago over global warming concerns is too flawed to let stand.

Health and Environment Secretary Rod Bremby said he couldn’t ignore growing scientific evidence about the harm that would be done by 11 millions tons of carbon dioxide being emitted by the plants each year. Scientists have largely concluded that manmade CO2 is causing climate change.

Bremby relied on a 2007 U.S. Supreme Court deeming CO2 a pollutant and an state attorney general’s opinion giving him broad authority to protect the environment and human health.

Supporters of Sunflower Electric Power Corp., the Hays-based utility partnering with out-of-state power providers on the project, counter that Bremby overstepped his authority because CO2 isn’t presently regulated at the state or federal levels.

Neufeld said he believes that Bremby’s decision to nix the plants over global warming concerns threatens the health of an increasingly vulnerable Kansas economy.

“It is clear and it gets clearer the more I go out and visit with people around the state how important it is to get this issue resolved of regulatory uncertainty,” Neufeld said during a recent interview in his Statehouse office. “I mean that clearly, it is just a major impediment of any new development of any consequence in Kansas.”

Morris said he believes that the proposal from Sunflower Electric Power Corp. to add new coal plants to its existing Holcomb generator is vital to energy security for both western Kansas and the state as a whole.

Since lawmakers don’t know when Sunflower’s legal challenge of the decision might make it before the Kansas Supreme Court, Morris said the ball will likely be back in the Legislature’s court come January.

“We will address it some way but it’s yet to be addressed as far as the strategy we develop,” Morris said. “There’s a lot of interest around the state in trying to solve this. I would certainly like to develop a comprehensive energy policy for the state.”

Practical project?

The extent to which the issue comes up next year could depend on the outcomes of legislative races across the state in the Nov. 4 general election.

Lawmakers failed to override Sebelius’ vetoes of bills allowing the plants by just a handful of votes and the election could alter that balance.

In addition, both Morris and Neufeld, who face no Democratic opposition next month, must also win re-election to their leadership positions later this year. Neufeld faces a likely challenge from Rep. Mike O’Neal, R-Hutchinson, who also supported paving the way for the coal plants.

Earl Watkins, the president and chief executive officer of Sunflower Electric, said that he would expect the climate to more favorable to concerns about Bremby’s ruling, even if there isn’t much of a change in the Legislature’s composition.

“I think even if we had back exactly the same numbers, the public perception of the issue, I believe, is much more advanced,” Watkins said. “They’re much more aware about how the regulatory uncertainty and the unfairness of this ruling is directly impacting their lives from an energy perspective.”

But Corcoran notes that since Bremby made his decision, things have been going well in Kansas. The state will nearly triple its production of wind power by the end of this year and is seeing multiple transmission lines projects in development for the first time in 30 years, she said.

“Since last October, we’ve added thousands of new jobs, recruited and retained new businesses, and issued 574 permits through KDHE, indicating that the Kansas economy is moving forward and our regulatory system is sound,” she said.

Watkins said some of the 200 megawatts of power Sunflower would control from the twin, 700-megawatt generators is needed immediately to help the utility serve its customers and take costlier natural gas plants offline .

But Corcoran cites numbers compiled by the Kansas Energy Council that shows Sunflower doesn’t need extra power in their service area until 2019.

“So, until there are clear guidelines from the federal government and new president, constructing a coal plant beyond what our state needs is not very practical,” Corcoran said.

But Neufeld said that if Bremby ruling stays intact, it will continue to cause uncertainly about the state’s rules and regulations and scare away businesses that might otherwise relocate to the state.

“There’s almost no plant that produces anything or any product of any kind that is safe from this ruling,” Neufeld said. “So people are reluctant to put the new money into things.”

— Maril Hazlett, www.climateandenergy.org