On the heels of the proposed coal plant deal between the Governor and Sunflower Electric, a troubling history between USDA and the utility has been unearthed as part of a federal lawsuit.
In the 1980’s, Sunflower got cheap loans from the federal government, courtesy of American taxpayers, in order to build a coal plant bigger than its ratepayers needed or could afford. As a result, the company has been unable to make the payments. USDA has three times bailed the company out by restructuring and forgiving hundreds of millions of dollars of loans and interest. In exchange Sunflower signed over some control of its business decisions to USDA.
Sunflower had USDA’s permission to build another coal plant it couldn’t afford, and without conducting requisite environmental analysis. But even then, USDA complained about the “extensive and time-consuming” assistance Sunflower’s business practices required.
Now, with the nation reeling from bad loans and dubious bailouts, with major banks refusing to finance risky coal plants, with Kansas’ vast wind resources remaining largely untapped, and with the costs of carbon emissions about to be accounted for, our governor and legislature have passed a law demanding that air quality permits be granted to build another coal plant larger than needed, and that customers cannot pay for.
Sunflower traded federal oversight for taxpayer dollars to bail it out of a previous misguided investment in coal-fired power. The company has defaulted on those loans multiple times. Now it is turning to out-of-state utilities to build and own another oversized coal-fired plant, sucking electricity and water out of Kansas, leaving us pollution, health costs, and huge financial risks.
The challenge: A critical utility provider for Western Kansans has some serious management and fiscal problems and has been stung by questionable business decisions in the past. Its service area contains significant reserves of two of the state’s most abundant and cleanest energy resources, wind and natural gas – both of which form the foundation of the Pickens Plan.
The solution proposed by Kansas politicians: Encourage this utility to make the very same mistake that got it into this mess by investing in another over-build of coal-fired capacity, sending millions of Kansas ratepayer dollars out of state every year for utility-grade coal we can’t produce.
Two critical legislative sessions were wasted pursuing this plan. Countless millions of dollars were spent on lobbyists and media supporting the coal plants, while the utility that wants them can’t even pay back existing loans from taxpayers. Meanwhile, Kansas, with the third best wind resource in the nation, ranks ninth in installed wind capacity.
It is unfortunate that, by trying anything to dig its way out of this mess, Sunflower may actually be digging a deeper hole for its ratepayers. It is inexplicable that our top elected officials have responded by throwing the company a shovel. The real question is: In this race to the bottom, who pays to dig the “winner” out of the hole?
Post Footer automatically generated by Add Post Footer Plugin for wordpress.
Sounds like someone with a gabmling problem running out of cash in Vegas and asking the bank for another loan because they want to double-down in blackjack.
Good for the watchdog groups who unearthed this boondoggle.
Pingback: New Wrinkle In Sunflower Coal Story: We "Own" The Loan | unEARTHED | the Earthjustice forum on environmental issues