As the Kansas Department of Health and Environment considers the new air quality permit request for Sunflower Electric’s proposed 895mw coal-fired power plant, and before KDHE announces the schedule for public hearings, it seems like a good time to ask: Why are we still paying attention to the whole coal plant debacle?
This blog originally ran over seven consecutive days at www.gpace.org, addressing seven of the most common questions we have heard regarding the ongoing energy policy – coal plant debate in Kansas. As the public comment period approaches for this project, the following questions could be helpful resources as you prepare to write your comment.
Governor Parkinson duped Sunflower with the whole compromise agreement, right? That coal plant will never get built, even if they get a permit, right?
Well, no. If Sunflower gets a permit for the current proposal, their odds of getting financing, getting grandfathered by Congressional deal-making, and/or getting the next state administration to give them another coal plant permit (or two) increase significantly. With coal plant proposals dropping like flies nationwide, the last coal plant built prior to carbon regulation (although risky) might not be a hard sell to struggling capital markets. As such, a permit in hand is a kind of currency at this point for coal plant developers.
Whether Governor Parkinson knew that, and whether he was concerned about it, is anybody’s guess.
Okay then, Parkinson guaranteed Sunflower a permit, so it’s a done deal, right? No sense in continuing to fight it.
No, again. The fundamental result of the settlement agreement between Governor Parkinson and Sunflower Electric – and the subsequent legislation passed by the Kansas Legislature – was simply to concede that they (the governor and pro-coal legislators) could not create a comprehensive energy policy for the state, and to punt the difficult tasks to the federal government.
The governor and the legislature removed even the potential of regulatory and rate oversight over Sunflower by the Kansas Corporation Commission, and stripped the Kansas Department of Health and Environment of any state authority over air quality. But the truth is, neither the governor, nor the legislature, nor a single utility has the ability to unilaterally ignore the existing enforcement agreement between the State of Kansas and the Environmental Protection Agency. KDHE still has a binding, legal obligation to enforce the federal Clean Air Act on behalf of EPA.
And EPA has already indicated that it has some serious concerns about the Sunflower permit request under existing CCA regulations.
All right, but don’t we need a new coal plant to “keep the lights on” in Western Kansas?
No, we don’t. Sunflower Electric reported to the Kansas Corporation Commission in 2008 no gap between its current electrical capacity and projected demand until 2018 – and then it’s only 14 megawatts. Their projections allow for a required 12% capacity reserve cushion, but do not include any energy efficiency measures to reduce demand or any wind or new sources of renewable energy that could be integrated by or before 2018, nor do they account for the significant (nationwide) decrease in the demand for electricity related to the economic recession.
Throw in Midwest Energy and there’s another 16 mw needed by 2018 (for a total of 30mw). That’s a long way from the 895mw capacity of the proposed coal plant.
There is enough current production capacity in Kansas to meet statewide projected demand for electricity past 2018 (again, without using any energy efficiency measures, bringing no new renewable energy online, and assuming that demand for electricity will increase as projected – which it has not).
Two other things to keep in mind:
- The proposed coal plant will take at least 5 years from the start of construction to even begin to produce electricity. If there are urgent concerns about the power supply in Western Kansas, why wait so long to deliver “needed” electricity?
- Sunflower Electric had a permit to build a 660mw coal plant (the Sand Sage Project), which they let expire in 2005. If there is such a critical shortage of electricity in Western Kansas, why didn’t they build that plant, which would be operational and providing electricity by now?
But they’re going to export all that extra electricity, right?
If Sunflower Electric actually owned all that extra electricity, perhaps they could export it. But they won’t own the extra electricity. They won’t even own the coal plant. Tri-State (a Colorado utility) is currently the equity owner of at least 80% of the proposed coal plant itself, and will own 80% of the electricity produced.
In fact, as of 2008, Tri-State had spent $46 million on the Holcomb coal plant proposal, not including land and water rights. By 2008, Sunflower hadn’t even made a dent in its multi-hundred-million dollar debt to American taxpayers for the first coal plant they built.
It’s like this: Two people buy a $1000 horse, and one of them pays $1000 while the other one agrees to keep the horse in his stable. When the $1000-partner wants to ride the horse, she doesn’t pay the owner of the stable for the privilege of riding the horse she already owns. Likewise, Sunflower Electric can’t export to Tri-State (or anyone else) electricity that Sunflower Electric doesn’t own.
So, if electricity ever moves from the proposed coal plant to Colorado, it will be because a Colorado utility already owns that electricity, not because Sunflower is selling it as an export product.
Okay…but the coal plant will provide needed jobs and economic development to Kansas in the midst of the worst recession in recent memory. How can we say no to that?
Because it won’t – not anytime soon. It is absolutely important to create jobs and investment in this recession. But given all the regulatory, legal, and financial issues with the proposed project, construction won’t begin for at least a couple of years. So, the construction jobs won’t exist until then. How does that help Kansans now?
When they were lobbying the legislature, coal plant supporters claimed the proposed project would generate thousands of construction jobs for Kansans and as many as 400 permanent full-time jobs in the state. But here’s the fine print:
- Tri-State is driving the project, and has a long relationship with its own coal plant builder – and it isn’t a Kansas company, or a union company.
- The specialized nature of most of the construction, and the absence of many of the needed specialized laborers in Kansas, means that the vast majority of the construction jobs will go to temporary workers from out-of-state. Once construction finishes, they and their money would leave Kansas.
- Well after the settlement agreement was signed, Sunflower Electric quietly revised the projected permanent jobs figure down to 50.
- As of 2008, the Colorado utility that will own most of the plant and its power had given Sunflower Electric $46 million in direct payments, EXCLUDING the purchase of land and water rights in Kansas. We know coal plant supporters hired a small army of lobbyists and lawyers (many from out of state) and bought a bunch of paid advertising to sell the project, but how many jobs has the coal plant created in Kansas with all that money in the midst of this recession?
While Kansas needed jobs and economic development, coal plant supporters blocked or slowed needed transmission and other energy investments that could have put Kansans to work. In fact, in the midst of the worst recession in recent memory Sunflower and their allies forced Kansas to say “no” to critical jobs, investment, and revenue from native Kansas fuels and the booming renewable energy sector. All for some coal plants that will import fuel and construction workers, and send water, electricity, and billions of dollars to other states – long after the current recession has turned toward recovery.
Speaking of renewable energy, don’t we need the coal plant to get transmission lines so that we can export our wind energy?
No, absolutely not. The bulk of the transmission that would come as part of the coal plant project would be to move electricity from the plant to its primary owners in Colorado – not to improve or enhance the overall transmission grid in Kansas.
An operational coal plant cannot efficiently ramp up or ramp down production of electricity. Therefore, once a large coal plant is burning coal (already purchased on long-term contracts) to generate electricity, it will flood available transmission with that electricity. Transmission lines have a finite capacity – that is, they can only move a certain volume of electrons, like a two, four, or eight-lane highway each moves a certain number of vehicles. As a result, the coal plant will effectively crowd out other sources of electricity, like wind turbines.
Additionally, a regional plan to build high-capacity transmission tapping the vast wind energy reserves of western Kansas and the Texas and Oklahoma panhandles is already underway independent of the proposed coal plant.
Also worth noting: the best markets for Kansas wind energy – with the highest demand for renewably generated electricity, the least ability to meet those demands, and the lowest costs for delivering the electricity – are arguably to the east/southeast, not to the west where there are existing local wind energy reserves and a phase-shift barrier.
Certainly, construction of a power plant will create some transmission infrastructure in order to move electricity toward demand. But that does not need to be a coal plant – it could be a natural gas plant as well. And we are seeing development of transmission infrastructure independent of any new power plants.
So it is not accurate to say that Kansas must have this proposed coal plant in order to get transmission infrastructure for wind energy.
Well, if it’s not about the jobs, or energy needs, or exporting electricity, what is the proposed Sunflower Electric coal plant about?
Exactly. If the proposed coal plant is not the best available way to address jobs, energy needs, or economic development, why would most Kansans support it?
In fact, most Kansans don’t support it, and neither does GPACE.
The coal plant proposal has been advanced and codified into Kansas law using misinformation. The state has been stripped of its ability to set air quality standards that benefit all Kansans for generations to come, just to allow this one unneeded coal plant to be built. Those actions open the door for Kansas to become the dumping ground for future coal plants that other states do not want to build or operate.
All this, while our nation struggles to rebuild our economy, create lasting jobs, assert critical leadership in the exploding renewable energy economy, and Kansas squanders its abundant native fuels, including wind and natural gas.
The coal plant project does not fundamentally address Kansas energy needs or economic opportunities. It will be financed and owned by out-of-state utilities. Kansas’ dwindling water will be used to make their electricity, while burning imported coal will pollute the lungs of Kansas children. It will make Kansas more dependent upon imported fuel. And it will expose Sunflower ratepayers and Kansas taxpayers to increased costs.
Bottom line: The proposal allows Tri-State Generation and Transmission Association to avoid stiff (and expensive) public opposition to a coal plant in Colorado. Sunflower Rural Electric Power Corporation in Kansas has a history of questionable risk and business management (with taxpayer bailouts to prove it). Combine those realities with manufactured partisan political hysteria about energy production and environmental accountability, and you’ve got the current coal plant proposal.
Kansas can do better. In fact, given economic and environmental realities, we must do better if we are to remain competitive in the world we share.
That’s what we’re fighting for. Join us.
