It’s baaaaaccccck…. Kinda. Meaning, the (sigh) coal plants.
October 20, 2008
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.
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
New report shows that $100 billion investment from federal government could create 2 million clean energy jobs (DOE/EERE News). (Let me see, the Fed just loaned AIG $85 billion, right? This simple little country girl - and taxpayer - is getting a bit confused on the meaning of the term “free market economy.”) Quotable:
A new report from the non-partisan Center for American Progress concludes that a $100 billion federal investment in clean energy technologies over the next 2 years would yield 2 million new U.S. jobs, cutting the unemployment rate by 1.3%, while putting the nation on a path toward a low-carbon economy. The report, prepared by the Political Economy Research Institute at the University of Massachusetts, proposes $50 billion in tax credits for energy efficiency retrofits and renewable energy systems; $46 billion in direct government spending for public building retrofits, mass transit, freight rail, smart electrical grid systems, and renewable energy systems; and $4 billion for federal loan guarantees to help finance building retrofits and renewable energy projects.
If $100 billion sounds like an unreasonable number, consider the fact that this year’s economic stimulus package amounted to more than $152 billion, of which about $100 billion was provided to taxpayers in the form of rebate checks. The Center for American Progress report concludes that clean energy investments would yield about 300,000 more jobs than if the same funds were distributed among U.S. taxpayers. The clean energy investments would also have the added benefits of lower home energy bills and reduced prices for non-renewable energy sources, thanks to the reduced consumption of those energy sources.
Major investors are pressuring the Securities and Exchange Commission (SEC) to require oil and gas companies to reveal the environmental risks of their supplies (Reuters). A concept also known as “carbon liability.” Quotable: “A group of 19 environmental, investor and non-profit groups want the regulators, under new proposals, to ask that oil and gas companies disclose reported reserves that have higher than average greenhouse gas emissions associated with their extraction, production and combustion.”
Trying to make coal clean (Financial Times). Ie, trying to build coal plants that can remove the carbon dioxide from their emissions. Yes, I’ve seen the pretty commercials, too, but in fact that technology is not yet workable on an applied market scale. Quotable:
Burning coal is the dirtiest, most old-fashioned way to produce electricity in the energy industry today. However, in the coming years many governments and energy companies are hoping to reinvent coal as a cleaner, more modern form of energy in the coming years, as they try to reconcile energy security with the need to halt climate change.
Pickens and water (Ft. Worth Star Telegram). Found this originally on Climateer. Pickens has announced that he is suspending his plans for the water pipeline he had planned to mine the Ogallala (selling the water to Dallas et al). He wants to focus on the wind and transmission plan instead.
If that plan does involve eminent domain, though, it will be interesting to keep an eye on how water rights might be treated under that arrangement.
Recent editorial in USAToday about how scarce water resources of the Great Plains need better protection. Written by a native western Kansan, the child of dryland winter wheat farmers (it sounds like). Quotable:
(Pickens) says little of his intention to market fossil water. That’s what conservationists call finite supplies of water dating to prehistoric times. The Ogallala Aquifer is the largest such supply on our continent. It underlies the Plains all the way from Pickens’ North Texas to South Dakota. Thanks to help he obtained from the Texas Legislature, he has stacked the board of a tiny water district. By the power of eminent domain, also granted him by the Legislature, he can force landowners to sell him rights to a 320-mile strip of land connecting him to Dallas. He will pipe the water down the same corridor he plans to use transmitting his wind power.
Water is life, and the rate we’re squandering it outpaces even our flagrant waste of oil. This is nowhere so true as on the Great Plains, where withdrawals from the Ogallala threaten to close down most irrigation farming before the end of this century.
Found a new blog that I love - Windpower Law. They are from New York but I am sure no open-minded Kansan will hold that against them, right? Correct. Scroll down the right side bar to get some neat links and resources. Great overview of all sorts of wind law, from wind farms to small wind.
And yes, New York does have wind farms. Upstate New York is kind of like - like a giant hand took Kansas, squeezed it up into more bumps and ridges, took away the horizon line, and let lots of trees grow. Lots. Fairly rural place, broken up by a few major population centers. Not even remotely like NYC. Lots of dairy farms. (At least that’s how I remember it from 20 years ago.)
— Maril Hazlett, www.climateandenergy.org
Straight from the press release from Innovest Strategic Advisors:
Sunflower Electric’s Expansion Proposal Illuminates Carbon-Risk Exposure and Financing Challenges of New Coal-Fired Power Plants in Light of Impending Climate Legislation.
25 March 2008 - Innovest Strategic Value Advisors, the world’s #1 provider of financial research that quantifies hidden risks and value, today released a case study on coal-plant financing called ‘Sunflower Electric Power: Carbon Risks Outweigh Benefits of Holcomb Expansion’. The report examines how current and proposed regulatory scenarios, alternatives to coal-fired generation, regulatory and stakeholder opposition, and rising construction costs continue to shift the competitive balance away from coal-fired electricity generation.
Innovest examined the economics of the transaction and determined that under the most plausible regulatory scenarios the decision to build new coal generating capacity will put Sunflower Electric’s ratepayers – who in this particular case are the actual owners – at significant risk. The report concludes that Sunflower’s management has not adequately addressed the competitive and financial risks associated with climate change in deciding to pursue the expansion of its Holcomb Station power plant.
The full report can be downloaded here.
Who is Innovest, the firm that carried out the research? According to the Solve Climate blog:
“Innovest Strategic Value Advisors are leading global experts of all things related to carbon risk. The firm has been the research arm of the Carbon Disclosure Project (CDP), which represents investors with $57 trillion in assets and collects greenhouse gas emissions data from 3000 of the world’s largest companies. Innovest has also developed analytical tools and models for evaluating the carbon risk of companies — intelligence it sells globally for a growing roster of clients.
Why did Innovest pick on Sunflower? My guess is that the Kansas coal debate has been so noisy, that we attracted enough attention to warrant our consideration as a cautionary case study for anyone else considering new coal generation.
In fact, Kansas and Sunflower Electric are not alone in the tough energy choices that we face. The world faces this same challenge - how to find low-carbon baseload fuels that will bridge us over a critical gap in energy technology (the lack of available carbon capture and sequestration technologies that can render coal a more viable option for a carbon-constrained world).
Energy efficiency and conservation, increased generation of renewables: These are examples of viable bridge fuels. Coal, a high carbon fuel, is not. The costs of energy are changing. In the future, coal will not only no longer be cheap - but it will also carry additional financial liabilities, due to its high carbon content and excessive emissions of the greenhouse gas carbon dioxide, which leads to global warming and climate change.
CEP live blogging from House Energy Committee - Edison Electric and JP Morgan presentations
March 18, 2008
Good morning. Today the House and Senate Committees on Energy and Utilities are meeting jointly in the Old Supreme Courtroom on the third floor of the Capitol.
The occasion is two pretty cool presentations. The first is by electric industry group Edison Electric Institute - they have both an industry side website, and a public portal. The latter is kind of an idiot’s guide to electricity, which Lord knows many of us need, but I also prefer the issue briefs they give on the industry side.
The other presentation is by investment bank JP Morgan. Not only is that the bank that just got a serious deal (I think) when they bought Bear Stearns, but more germane to the Energy committees of the KS legislature (maybe!), JP Morgan is also one of the Carbon Principles signatories, a deal also endorsed by Morgan Stanley and Citigroup. This agreement essentially said that since carbon regulation is coming, the power companies who come to them for financing for new plants need to have a plan to deal with greeenhouse gas emissions.
EDIT - Hey, guess what. The second presenter is from Morgan Stanley, not JP Morgan. Unlike what was announced earlier…? The audience debates in low tones.
We await the committee(s). Hit refresh on your browser to check back in when need be. Kick-off is at 9:15 or so. Members of the House committee include: Representatives Johnson, Flora, Mast, Sloan, Long, Moxley, Faust-Goudeau, Swanson, Proehl, Keuther (Ranking Minority), Holmes (Chair), Olson (Vice Chair), Svaty, McLachlan, Fund, Knox, Hawk, Light, Neighbor, Morrison, and Myers.
I might be wrong about the Senate Committee being invited… am I? Could be. Thought I read it somewhere, but maybe no. If I’m in the ballpark,
Everyone is here early!!! We start early. Joint meeting starts at 9:30, apparently. First, they will consider SB 586, the Senate side nuclear power bill. A little bonus here.
News Updates: Svaty’s testimony, in full
March 14, 2008
Thanks to the Salina Journal, here is the full testimony of Rep. Josh Svaty before Congress - the Select Committee on Energy Independence and Global Warming.
Testimony of Joshua Svaty, Member, Kansas House of Representatives, Farmer, rural Ellsworth County
Presented before the Select Committee on Energy Independence And Global Warming
A hearing on the EPA’s response to the Supreme Court’s decision, Massachusetts v. EPA
March 13, 2008
Thank you for the opportunity to testify before you today. I am Joshua Svaty, I live and farm in rural Ellsworth County, Kansas. In 2002 I successfully ran for the Kansas House of Representatives, district 108, and have been fortunate to continue serving in that capacity for the last six years. I am a senior member on the House Energy and Utilities Committee, I serve as the Ranking Minority Member of the House Agriculture and Natural Resources Committee, and I have also served as the Ranking Minority Member of the Joint Interim Committee on Energy and Natural Resources. In addition to my legislative duties, I also serve as a Governor’s appointee on the Kansas Energy Council, a broad committee of public and private interests charged with crafting long-term energy policy for the state of Kansas. In that capacity I have served as the Chair of the Goals committee, and though I don’t want to insult your intelligence I will point out the obvious; a committee that has a subcommittee to determine the full committee’s goals is going to have trouble ever accomplishing much of anything.
I have been asked to deliver testimony broadly on the question of state policy in light of the EPA not setting a policy direction on Greenhouse Gas Emissions (GHGs). Specifically, I have been requested to provide my direct knowledge of legislative action in Kansas surrounding the recent decision by Kansas Department of Health and Environment (KDH&E) Secretary Bremby to deny in October of 2007 the air permits for two supercritical coal-fired generators located in Western Kansas. The questions posed to me are as follows:
News Updates: KS goes coal-crazy this weekend
March 10, 2008
Morning, everyone. Happy Monday! Sorry to do this to us, I’m sure we’ve all heard more than enough about coal, but I have to get through these articles first so we can get to the rest of the week.
Actually, I didn’t even try to list them all - to sum up, the Kansas press is doing a very strong job of following up on how their local legislators are voting on the Holcomb/ energy bill currently before the Governor. My google news alerts overfloweth. Yay for the Kansas media.
Kansas and coal. The legislator forum in Salina this weekend - “What’s Up with Coal in Kansas?” - drew a standing room only crowd (Salina Journal). That gives me chills. On the hot seat (ha — a little pun, there, global warming, hot seat, coal, get it?) were Representatives Josh Svaty, D-Ellsworth, who voted against the Holcomb bill, and Sen. Pete Brungardt, R-Salina, and Rep. Deena Horst, R-Salina, who voted for. Everyone explained their reasoning.
No global warming deniers in the Salina contingent, though, apparently - they all agreed on climate change.
All of the legislators said Kansans should expect to be affected by climate change.
“I learned very early, on the farm, there’s a cause and effect to everything,” Svaty said. “You can’t do anything in abundance and not think it’s going to change something.”
He said there’s no doubt that the extraction of fossil fuels and pumping of carbon into the atmosphere has had an effect.
“When we create chemical reactions, it changes the environment,” Svaty said. “I do believe that is causing the earth to warm. I think that we have to do something about that. … We have to begin to look for ways in which we can extract power without making such great and enormous chemical reactions that alter our environment.”
Editorial coverage. Randy Schofield of the Wichita Eagle put it pretty bluntly: “Plan for It: Carbon regs are coming.” The Eagle editorial board also extensively interviewed Westar’s Jim Ludwig and Bill Moore about the utility’s new deal with KDHE. Sunflower Electric and others have criticized this deal, more or less characterizing Westar as having been bullied into it.
However, Moore and Ludwig did not seem very cowed. Quotable:
“Our focus on regulatory uncertainty doesn’t focus on Rod Bremby and KDHE at all,” said Westar president and chief executive Bill Moore. He cited “about 50 different proposals” in Congress for addressing climate change with carbon regulation.
“We’re pretty convinced that in the next few years we’re going to have federal legislation reducing greenhouse gases,” said Jim Ludwig, Westar’s vice president for public affairs. “That’s really to us the foundational issue on regulatory uncertainty.”
In response to the growing scientific and political consensus on warming, Westar adopted a climate change policy (last August, before the Bremby decision) and recently announced an agreement with KDHE in which Westar will work to voluntarily reduce greenhouse gases from existing coal plants.
“We’re trying to be an early adopter,” Moore said.
Westar sees these steps as hardheaded, prudent business responses to a changing energy market.
Likewise, Bremby recently said that his Holcomb denial was based in part on the probability of rigorous new federal rules that could reduce carbon emissions 60 to 80 percent below 1990 levels by 2050.
Both Bremby and Westar agree on the need to lay the groundwork for these looming changes and not be taken by surprise later.
Speaking of carbon regulation… what might it look like? The Council for Foreign Relations gives an overview of the green policies of the three presidential candidates. Also, EnergyBiz interviews PewClimate’s state energy policy expert Eileen Claussen and others, to investigate the need for a federa Renewable Portfolio Standard that will tie all the state ones together a bit better.
— Maril Hazlett, www.climateandenergy.org
Day 4 - CEP blogging live from Holcomb/ energy bill (HB 2711) hearing before the House Utilities Committee
February 7, 2008
(This post will be updated throughout the morning. Hit your refresh button occasionally to check for new info.)
Welcome to Day 4 of CEP live blogging from the Holcomb/ energy bill hearings in the House. Maril on keyboard, Eileen and Nancy close by, holding pencils. If you want to refer to the text of the bill as we go along, click here. If you want to refer to Gov. Sebelius’s response to the legislation, click here. If you want to see our record of Day 1 testimony, click here; for Day 2, click here. For Day 3, click here.
It should be noted - ours is obviously a rough transcript. If you want to find the real one at some point in time, look for it at the Kansas Legislature’s website. (BIG EDIT: no, apparently you won’t, there is no transcript. There also seems to be dispute over whether testimony is still posted on the committee website. Anyone who testified, from any position, who wants me to post the testimony on the CEP main website, just send it to me. I am happy to provide access to the public record. I do have some problems posting giant pdfs, though, with lots of slides, please bear that in mind).
Also, if you have comments on either the transcript or the fact checks, please of course feel free to email me at hazlett at climateandenergy dot org. If you have a good point, I am more than happy to go back and modify an original entry with an EDIT note.
And if you don’t want to put it in writing - for whatever reason - 
either try telepathy, or find someone who knows me to pass the message on. Or try the phone number on our main website, www.climateandenergy.org. That will probably get to me eventually.
9:05 a.m
Here we go! Chairman Holmes is not here, so someone else calls the hearing to order. There is a bonkers amount of testimony to get thru today. (For those interested in wind, there is also a legislative briefing here in the Old Supreme Court Room after the hearing concludes.) There will only be five minutes per opponent.
Ron Hammerschmidt, KDHE
They have problems with the bill. There are a number of regional agreements on greenhouse gases, including the Midwest Governors. They are all looking at cap and trade. This bill’s credit structure is not compatible. We want to follow the framework for a national approach.
Specifically, section 10 - terminology of “affected facilities” is too close to Clean Air Act language. Change it or there will be unintended consequences. Section 10 and 12 - there is implication of a permitting authority, but that is not specifically discussed who or how. Give it to a state permitting agency - not necessarily KDHE - but it needs to be specifically assigned.
We are uncertain if you want us to enforce Clean Air Act. We don’t enforce all of it right now, but we could - small vehicles, etc. Let us know, because your wording is vague.
Section 30 - there are more overlaps with Clean Air Act. You are requiring us to implement it, and we have some differing requirements for stack heights and analysis. Nor do we require an environmental impact statement for these facilities. You are asking us to be more stringent than we are, and you are taking away our flexibility as a state. We will just have to enforce the federal standards, if we don’t have state discretion. In another section - you allow us to take some extraordinary actions, but not others.
Grover Norquist, Americas for Tax Reform
I thought I’d seen it all… until this bill. This is a carbon tax. It will kick in down the road. Like the income tax originally did, now everyone is subject to it. This bill has the same potential. It will create a tax that will have massive impact on Americans. A sword of Damocles. It also puts a big regulatory burden on people. And then manufacturers will not be in Kansas anymore.
Day 3 - CEP blogging live from Holcomb/ energy bill (HB 2711) hearing before the House Utilities Committee
February 6, 2008
(This post will be updated throughout the morning. Hit your refresh button occasionally to check for new info.)
A moment before we start - to the people of the South, who are now recovering from that horrible series of tornados, our hearts here in Kansas go out to you.
Welcome to Day 3 of CEP live blogging from the Holcomb/ energy bill hearings in the House. Maril on keyboard, Eileen and Nancy struggling through mega snowdrifts to get here. If you want to refer to the text of the bill as we go along, click here. If you want to refer to Gov. Sebelius’s response to the legislation, click here. If you want to see our record of Day 1 testimony, click here; for Day 2, click here.
It should be noted, although I am sure it is obvious - ours is a rough transcript. If you want to find the real one at some point in time, look for it at the Kansas Legislature’s website.
(BIG EDIT: no, apparently you won’t, there is no transcript. There also seems to be dispute over whether testimony is still posted on the committee website. Anyone who testified, from any position, who wants me to post the testimony on the CEP main website, just send it to me. I am happy to provide access to the public record. I do have some problems posting giant pdfs, though, with lots of slides, please bear that in mind).
8:36 a.m.
We are sitting outside the old Supreme Court Room, just jawing, because there is an earlier meeting. I can’t see the John Brown mural from here - that makes me sad. But we are waiting patiently. Hearing should start somewhere in the vicinity of 9:00 a.m.
9:00 a.m.
Chairman Holmes calls the hearing to order. Asks conferees to restrict testimony to seven minutes, don’t go over, there will be a timekeeper. He’s ending at 11:00 no matter what.
Regarding a request for the legislative history re 1993 lenergy egislation, see his secretary for copies because it’s huge and we don’t want to kill too many trees copying it all. (pretty much a direct quote)
Financing coal plants - more news
February 5, 2008
The Wall St Journal story on banks’ reluctance to finance construction of coal plants has spread to NPR. Reuters ran another snippet on the rising price in coal forecasts. The NPR story went deeper into the issue, including a discussion of the “carbon principles” that these banks - Citigroup, Morgan Stanley, and JP Morgan Chase - want utilities to respect. The Principles were negotiated as a compromise over a nine month period, and included talks with major environmental groups like NRDC.
From the Morgan Stanley press release, it sounds as if these Principles are exactly a response to the federal climate of regulatory uncertainty re carbon dioxide. Quotable: “The need for these Principles is driven by the risks faced by the power industry as utilities, independent producers, regulators, lenders and investors deal with the uncertainties around regional and national climate change policy.”
The Principles are:
Energy efficiency. An effective way to limit CO2 emissions is to not produce them. The signatory financial institutions will encourage clients to invest in cost-effective demand reduction, taking into consideration the value of avoided CO2 emissions. We will also encourage regulatory and legislative changes that increase efficiency in electricity consumption including the removal of barriers to investment in cost-effective demand reduction. The institutions will consider demand reduction caused by increased energy efficiency (or other means) as part of the Enhanced Diligence Process and assess its impact on proposed financings of certain new fossil fuel generation.
Renewable and low carbon distributed energy technologies. Renewable energy and low carbon distributed energy technologies hold considerable promise for meeting the electricity needs of the US while also leveraging American technology and creating jobs. We will encourage clients to invest in cost-effective renewables and distributed technologies, taking into consideration the value of avoided CO2 emissions. We will also encourage legislative and regulatory changes that remove barriers to, and promote such investments (including related investments in infrastructure and equipment needed to support the connection of renewable sources to the system). We will consider production increases from renewable and low carbon generation as part of the Enhanced Diligence process and assess their impact on proposed financings of certain new fossil fuel generation.
Conventional and advanced generation. In addition to cost effective energy efficiency, renewables and low carbon distributed generation, investments in conventional or advanced generating facilities will be needed to supply reliable electric power to the US market. This may include power from natural gas, coal and nuclear technologies. Due to evolving climate policy, investing in CO2-emitting fossil fuel generation entails uncertain financial, regulatory and certain environmental liability risks. It is the purpose of the Enhanced Diligence process to assess and reflect these risks in the financing considerations for certain fossil fuel generation. We will encourage regulatory and legislative changes that facilitate carbon capture and storage (CCS) to further reduce CO2 emissions from the electric sector.
My impression - policy does a whole lot of talking, but money does a whole lot of the walking.
— Maril Hazlett
Want to know more about climate and energy in the Midwest? Check out www.climateandenergy.org.
DAY 2, in the House - CEP blogging live from the Holcomb/ energy bill (HB 2711) hearing
February 5, 2008
(This post will be updated throughout the morning. Hit your refresh button occasionally to check for new info.)
Hi all. Maril here. Eileen to my right, Nancy to my left (or somewhere). Let’s boogie. If you want to refer the text of the bill as we go along, click here. If you want to refer to Gov. Sebelius’s response to the legislation, click here. If you want to see our record of yesterday’s testimony, click here.
The proceedings begin at 9:00 straight up.
9:04- um. no they don’t.
9:05
Chairman Holmes opens the meeting. Talks a little bit about the handouts for today.
Earnie Lehman, Midwest Energy
Point: these plants are necessary to provide cheap coal electricity to western KS. Major lack of new baseload alternatives in KS. Holcomb essential to meeting these needs for all western KS. In 2005 residential customers in western KS paid 34.2% more than eastern. Commercial paid more than 42%. Etc. Midwest also has only six customers per mile of line. Their customers do practice energy efficiency and use less than KCPL/ Westar customers. Their income per household is also comparatively less v. KCPL/ Westar service areas, so they have less money to pay for energy. They are also comparatively older overall.
Midwest is trying to find energy to serve its customers. By end of 2008 Midwest Energy will have 25 MW of wind energy, which will be 16% retail of its peak load. They aren’t big enough to get other power - cheap coal power - on their own. Sunflower is the only one who will provide them baseload power, so far. Thay are looking at coal-fired in Arkansas, OK, and NE, but they want to stay in state.
Re gas: worried about electric generation from natural gas. Worried about this trend. Not sound policy, since natural gas prices are higher in the summer than they used to be.
Mac McLenna, Tri-State
Tri-state has 44 members. Their mission in life is to serve customers with low-priced electricity, and they need new baseload resources. They got involved in Holcomb because Sunflower responded to the RFP, in effect recruiting TriState to come to KS. Tr-sState co-owns many facilities with electric cooperative.
Why KS? (1) Time. Previously Sunflower got permit in KS, and economics were well defined, Holcomb had good workforce, rails, etc., good pre-existing facility - and, they thought, there was regulatory certainty in Kansas. Now it’s a mess after Bremby’s decision.
“Wall St Shows Skepticism Over Coal” - from the Wall St. Journal
February 5, 2008
Before we leap into the crazy bonkers live blogging portion of today, here’s an important article from the venerable Wall Street Journal - which, bless its heart, probably no one is can credibly dismiss as a liberal rag. About 20 very cool folks forwarded me this clipping, and number one on that list is my Dad.
Reprinted in its entirety below:
Wall Street Shows Skepticism Over Coal: Banks Push Utilities To Plan for Impact Of Emissions Caps
By JEFFREY BALL
February 4, 2008; Page A6
Three of Wall Street’s biggest investment banks are set to announce today that they are imposing new environmental standards that will make it harder for companies to get financing to build coal-fired power plants in the U.S.Citigroup Inc., J.P. Morgan Chase & Co. and Morgan Stanley say they have concluded that the U.S. government will cap greenhouse-gas emissions from power plants sometime in the next few years. The banks will require utilities seeking financing for plants before then to prove the plants will be economically viable even under potentially stringent federal caps on carbon dioxide, the main man-made greenhouse gas.
The move shows Wall Street is the latest U.S. business sector that sees some kind of government emissions-capping as inevitable. But it shows disagreement about what to do.
It also marks the latest obstacle to coal, which provides about half of U.S. electricity but emits large amounts of CO2. Citing costs, the U.S. government last week pulled support for a project called FutureGen that many utilities saw as a step toward burning coal cleanly.
The standards, which would apply to all but the smallest plants, result from nine months of negotiations among the three banks and some of the biggest U.S. utilities and environmental groups. The standards could hurt coal-dependent utilities that haven’t begun factoring a future price of CO2 emissions into their planning. But they could help utilities that have.
the possible future of carbon regulation in Kansas
January 22, 2008
CEP’s Community Energy Forum in Salina went very well last night. (There is another in Overland Park tonight, and another in Topeka tomorrow - see CEP press release for details.)
CEP invited analysts from energy consulting firm Synapse Energy to the forum, and they had some interesting things to say. If you’d like to see the .pdf of the powerpoint presentation by David Schlissel and Ezra Hausman, please click here (.pdf, 1.3 MB)
From the Harris News coverage, some quotables:
Synapse senior consultant David Schlissel said federal limits on coal plants’ carbon emissions are “more than likely” in the near future.
“A proposal before Congress right now would mandate steep reductions of 50 to 80 percent in CO2 emissions,” Schlissel said. “The adoption of these federal regulations will mean substantial costs for new power plants that are coal- or gas-fired. Coal, of course, is the most carbon intensive.”
Synapse has developed a forecast of expected costs related to carbon emissions for power plants and other businesses.
If the regulatory cost, for instance, becomes $20 per ton each year, companies such as Sunflower that emit 12 million tons annually will have to purchase allowances of at least $240 million.
Part of Sunflower’s response that I found interesting - they again mentioned the potential of their bioenergy project (which is not contained in their proposal) as a partial offset to some of the problems with the proposed coal plant.
A while back, an argument you heard a lot was that Kansas wind power couldn’t be developed without transmission lines for coal power, and that turned out not to be the case. Now the coal cart is getting hitched to biofuels - but there’s a lot of lower cost ways to produce biofuels, with a lot more proven technology.
Also re renewables - on one hand, renewables are booming right now. On the other hand… that could all go south pretty quick (or at least take a significant detour) if the federal government does not renew the production tax credits for wind and solar. The renewal of these credits did not make it through the highly contentious battle over the energy bill, and the initiative is now up again before Congress (CSMonitor).
-– Maril Hazlett
Want to know more about climate and energy issues? Check out www.climateandenergy.org.
coal special interest dollars (coming soon to a town or TV near you)
January 18, 2008
More on coal from today’s Washington Post - $35 million being spent on PR to build coal plants and fight climate change legislation. (I’ll reprint it in full below, because I have noted that the Post’s links often expire on me.)
Coal Industry Plugs Into the Campaign
Washington Post Staff Writer
Friday, January 18, 2008; Page D01
A group backed by the coal industry and its utility allies is waging a $35 million campaign in primary and caucus states to rally public support for coal-fired electricity and to fuel opposition to legislation that Congress is crafting to slow climate change.
The group, called Americans for Balanced Energy Choices, has spent $1.3 million on billboard, newspaper, television and radio ads in Iowa, Nevada and South Carolina.
One of its television ads shows a power cord being plugged into a lump of coal, which it calls “an American resource that will help us with vital energy security” and “the fuel that powers our way of life.” The ads note that half of U.S. electricity comes from coal-fired plants.
winding up the week
January 18, 2008
Big story on coal from the LA Times. A selection of quotables:
America’s headlong rush to tap its enormous coal reserves for electricity has slowed abruptly, with more than 50 proposed coal-fired power plants in 20 states canceled or delayed in 2007 because of concerns about climate change, construction costs and transportation problems…
The setbacks have energy regulators jittery about the prospects for meeting America’s ever-increasing hunger for electricity. They say that any delays in building new capacity — coal-fired or otherwise — add pressure to an already strained electricity infrastructure, raising the prospect of shortages or sharply higher prices….
A recent study by the industry-funded Electric Power Research Institute projects that coal power will cost more than nuclear power or natural gas by 2030 if coal’s carbon dioxide problem is solved the way most experts envision. Still unproven, that method involves separating carbon dioxide from the gas stream before it heads out of the stacks, collecting the vapors and then storing them underground. That would also require a new network of pipelines to move carbon dioxide from the power plant to a geologically sound site….
Another industry analysis predicts that wholesale electricity prices will rise 35% to 65% by 2015 if the Warner-Lieberman climate change bill — one of the more conservative plans put forward in the Senate — is enacted…..
A more immediate challenge is transportation, from missing links in the rail routes to silted-up Great Lakes shipping channels, which raise concerns that coal may not be so simple to get at after all. “Can coal deliver?” asked Gary Hunt, president of Global Energy Advisors, a Sacramento-based unit of Global Energy Decisions. “The answer is no,” he said — not without “billions and billions” spent on improvements for mining capacity, railroads and shipping….
Go ahead and read it all, don’t be at the mercy of my editing skills. There’s a lot more to the story that the parts I just clipped out. The overall article is good in that it takes a good overview of the coal power issue, beyond the will-the-plants-get-built-or-not perspective. (I’m as guilty of that limited view as anyone, I know.)
The piece sure could have stood to mention, though, how increasing our energy efficiency can help get some of our demand (our increasing demand, mind you) better under control.
Finally, a short video clip from our friends Down Under - the “black balloons” approach to envisioning how carbon dioxide emissions in our daily lives.
I completely blew out my right arm while playing Wii Tennis the other night. I doubt you’ll hear much more from me today typing is hard. everyone have a good weekend.
— Maril Hazlett
Want to know more about climate and energy in the Midwest? Check out www.climateandenergy.org.
KDHE DID NOT CREATE REGULATORY UNCERTAINTY
January 17, 2008
BY NANCY JACKSON
reprinted from the Wichita Eagle, 1/17/2008
In Kansas energy debates, we have heard a lot lately about “regulatory uncertainty.” But what does that mean, exactly?
Sunflower Electric Power Corp. CEO Earl Watkins has asserted that regulatory uncertainty is bad for business (”Regulatory process needs to be certain, impartial,” Jan. 15 Opinion). So has Amy Blankenbiller, CEO of the Kansas Chamber. They are right. Businesses do need a set of clear and consistent rules.
Ironically enough, that is precisely why some of the nation’s leading corporations — and largest greenhouse gas emitters — are calling for carbon dioxide regulation.
As Duke Energy CEO Jim Rogers said last year, when elected to chair the Edison Electric Institute, “I’ve seen several surveys that say 70 or 80 percent of the executives in our industry think there will be carbon regulation. In a sense, we’re all building our business plans around the carbon scenario. The only issue is what the regulations will look like and when they’ll be implemented.”
Duke and other corporate superstars — including Caterpillar, Deere & Co., Dow Chemical, General Electric and Shell — have formed the U.S. Climate Action Partnership. Together, they are working toward a cap-and-trade system that would, in effect, put a price on carbon dioxide and other greenhouse gases.
These Fortune 500 companies believe they can “slow, stop and reverse the growth of U.S. emissions while expanding the U.S. economy.” Presumably, they know a little something about economic success and regulatory certainty.
They also know that if you’re not at the table when the rules get set, you’re on the menu later. That is why they are actively working to shape carbon dioxide regulations. Kansas businesses should do the same.
Kansas Health and Environment Secretary Rod Bremby’s decision in October did not create regulatory uncertainty; it reflected regulatory uncertainty:
• As of July 2007, members of the 110th Congress had introduced more than 125 bills, resolutions and amendments specifically addressing global climate change and greenhouse gas emissions. Decisions made now under the specter of such regulations may be deemed imprudent under law and subject retroactively to penalty.
• In the past 18 months, proposals for 20 coal plants have stalled nationwide because of public concerns about air pollution, increases in greenhouse gases, rapidly climbing economic costs and future liability.
• Regional agreements between governors in the Northeast, West and, most recently, Midwest provide clear targets for emission reductions and allow for a cap-and-trade system that would put a price on carbon emissions.
Neither Bremby nor Gov. Kathleen Sebelius is “out front” on this issue. They are, in fact, arguably behind — 22 states already have climate action plans and another 14 are creating plans.
Regulatory certainty is needed, and in the wake of Bremby’s decision, Kansas has a historic opportunity to lead the nation in creating it. Let’s stop considering false choices between economic vitality and climate stability, and start talking instead about how we achieve both.
Nancy Jackson is executive director of the Climate and Energy Project at the Land Institute in Salina.
Want to know more about climate and energy issues in the Midwest? Check out www.climateandenergy.org.
carbon, carbon, and more carbon
January 7, 2008
One of the joys of this job is reviewing our Google Analytics profile, and seeing the paths that folks are taking through the CEP website. Google analytics is more than slightly big brother-ish, but speaking as an educator - it really, really helps me do my job. People learn in such different ways, and my job is to serve all those different needs. (Eek.)
The google result I find most interesting: By far the most popular word in the CEP Glossary is carbon dioxide. (Not greenhouse gases, mind you. Which I also find interesting.) Some of you may know our Glossary - it’s just a list and definitions of common terms used in climate and energy conversations, linked to text all throughout the site. Users tend to hopscotch all over the Glossary, too, since all the listings are cross-referenced. Because the Ice Storm of 2007 knocked me off kilter for a while, I still have a few terms to fill in, but there’s probably more than 200 completed.
Running a close second behind carbon dioxide is carbon regulation. Fairly evenly scattered through there are carbon liability and carbon credits.
You are probably noting a trend. So did I. Thus I finally got off my rear and finished the definitions for cap and trade, carbon tax, and carbon sequestration. My coworkers laughed at me when I whined that it wasn’t easy to reduce those ideas down to 100 words or less so (a) I quit whining (shame will do that to you), and (b) lengthened those entries just slightly.
Of course I have an ulterior motive for posting these. I have found that there is no better way to find those embarrassing broken links than to draw attention to recently posted web content… so - sigh - if you find any bad links, please just let me know.
— Maril Hazlett
Want to know more about the Climate and Energy Project (CEP)? Check out our main website at www.climateandenergy.org.
