By Scott Allegrucci, Director of GPACE

The long-awaited air quality permit application from Sunflower Electric Power Corporation to build a 900mw coal-fired power plant has been submitted to the Kansas Department of Health and Environment.

Sunflower once said it had to have the permit by the end of the 2008 legislative session, then by June of 2009, then that it would submit the permit application by early November, then by the end of the year, then before the start of the legislative session.

So why the delay?  There are lots of possibilities, including:

• Possible difficulties modeling air quality measures for the new project.
• Possible difficulties attempting to secure financing in the current economic and regulatory climate.
• Possibly they were waiting out the threat of oversight over Tri-State (the utility that will actually finance and own the plant and its energy) by the Colorado Public Utilities Commission.
• Possibly they are concerned about proposed federal energy legislation.
• Possibly they are scrambling in the fast-changing federal regulatory environment.
• Perhaps they hope for legislative pressure on KDHE timed to the 2010 session.
• Or maybe they hope to delay a final decision until a new state administration is in place.

In the meantime, much has changed:

• Kansas now ranks #2 in the nation for wind resource (behind Texas, according to new data from the National Renewable Energy Laboratory).
• New technology has expanded estimated domestic natural gas reserves, and natural gas prices are very low.
• Developing new energy efficiency measures, Class 4 & 5 wind, and natural gas are all cheaper than developing new coal-fired generation.
• EPA has established carbon dioxide as a pollutant, and is positioned to regulate CO2 (as directed by the U.S. Supreme Court).  EPA is also enforcing existing regulations covering other coal plant emissions.
• Demand for electricity is significantly lower in Kansas and nationwide.
• Kansas has a Renewable Energy Standard on the books.
• Colorado is moving for a more aggressive RES.
• New Mexico & Texas are advancing aggressive renewable energy plans.
• Nebraska is developing wind, has joined Kansas in the Southwest Power Pool, and has excess baseload electricity that it wants to sell.
• Sunflower Electric owes hundreds of millions of dollars in unpaid loans to taxpayers, even after three bailouts costing taxpayers hundreds of millions more.
• Transmission infrastructure to move electricity (esp. wind energy) through and out of Kansas is moving forward.
• Unemployment is higher nationwide and in Kansas.
• Sunflower has revised claims of permanent jobs from the plant down from “over 200” or “between 300-400” to “about 50.”

Yet, Sunflower’s commitment to burn coal and to the fortunes of its Wyoming and Colorado partners remains locked in tight.  No question, it’s good that the new coal plant permit will soon be available for public comment and review, especially given the backroom deal making that advanced it this far.

But consider this:  even if the permit is granted (and despite two hijacked legislative sessions; millions of dollars spent on advertising, lobbyists, and attorneys; and a secret pact with the governor; this is not certain), the inevitable lawsuits are settled, and Sunflower can figure out how to finance the plant and absorb increased costs related to coal, the Holcomb coal plant is still at least two years away from breaking ground (and creating jobs) and at least five years away from producing electricity (for Tri-State in Colorado).

The whole project really has nothing to do with Kansas energy needs.  It will be financed and owned by out-of-state utilities.  It will make Kansas more dependent upon imported fuel.  And it will expose Sunflower ratepayers and Kansas taxpayers to increased costs.  One wonders what might have been if Sunflower had pursued a more responsible course?

How many Kansans might be working right now had Sunflower chosen to tap Kansas wind and natural gas to meet their energy needs?  And energy efficiency technology and local HVAC technicians to reduce their electricity load?  How much of the severance revenue, fuel purchases, and economic stimulus that will now go to Wyoming, might have come to Kansas for natural gas and wind energy?  How much Kansas water will now be used to make Colorado’s electricity?  How much of the money to be paid to railways shipping coal from Wyoming to the plant, might have gone to Kansas farmers, ranchers, and school districts for wind and gas leases?

We may never know.

Scott Allegrucci