KCC Approves Power Line Through Area

By Mike Corn of The Hays Daily News

TOPEKA — With few changes, the Kansas Corporation Commission has approved the second phase of a massive electric transmission line that will run from Hays to the Nebraska border.

The approval came Wednesday, on the last day the KCC could deal with the issue.

The 345,000-volt line ultimately will run from Spearville to Hays and then north to the Nebraska border, eventually ending in Axtell, Neb.

ITC Great Plains will build the Kansas stretch of the line, with Sunflower Electric and Midwest Energy handling maintenance in their respective trade areas.

The second phase of the line, as approved by the KCC, will be built using single steel poles, ranging in height from 100 to 150 feet tall. On average, they will be placed about 900 feet apart.

The second phase of the line will be about 85 miles long, costing nearly $92 million to build. It generally will run northeast out of Hays, passing several miles east of Plainville and Stockton. It will go through Smith County about 3.5 miles east of Kensington.

The first phase of the project, approved a year ago, will use wooden structures to carry the lines.

In its 35-page order, the KCC went through each public request involving placement of the line. Some it accepted, while others were denied.

Also, the Nature Conservancy sought an alteration in the route to avoid native grassland that might be home to the lesser prairie chicken. TNC suggested the line run parallel to U.S. Highway 183 from Hays to Rooks County, then northeast to a point about 5 miles east of Plainville.

ITC countered that the new route would affect 133 additional landowners.

“The commission concludes that evidence in the administrative record indicates that ITC Great Plains has taken steps to minimize intrusion of the line upon the environment and in particular to be sensitive to the presence of whooping cranes and lesser prairie chickens,” the KCC’s order states. They denied the suggestion.

While the KCC didn’t order it, ITC Great Plains voluntarily will give updates on construction of the line and any changes that might be made.

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.

3 in a series of 7

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 proposal?

We’re answering this basic question in a series of seven consecutive blogs/questions.  Here’s the third.

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?

This is #3 of 7 questions – check back tomorrow for #4.

Press Release from the Kansas Corporation Commission

Topeka, KS - The Kansas Corporation Commission (KCC) issued an order Thursday, February 11th approving a $4,819,343 increase in rates for customers of Wheatland Electric Cooperative.

“The Commission finds that after balancing all the interests impacted by this proceeding, and having considered the comments received by the Commission, the unanimous S&A [stipulation and agreement] reached by the parties is in the public interest and should be approved,” read the order.

Included in the $4.8 million rate increase is a power cost adjustment (PCA) of $0.0622 per kilowatt hour to be embedded in base rates. The power cost adjustment will allow Wheatland to pass through changes in wholesale power costs from their power supplier, Sunflower Electric Power Corporation, on a monthly basis.

Wheatland filed an application for a $7.7 million (12.3 percent) rate increase on March 2, 2009, and a unanimous settlement agreement was filed on August 20, 2009 in which the parties agreed to a significantly reduced $4.8 million rate increase.

“The S&A reduced the amount of Wheatland’s requested revenue increase to a reasonable level and lowered the increase ratepayers will have to pay.” The order continued: “At the same time, the S&A provided Wheatland with sufficient revenues and cash flows to meet its financial obligations and provide reliable service.”

Wheatland elected to file its application under certain regulatory provisions available for the benefit of small rural electric distribution cooperatives. As part of that process, the Commission issued an order on September 9th setting interim rates based upon the unanimous settlement and opening up a 90 day comment period to allow customers to submit comments in support of or in opposition to the rate increase.

A hearing was held on January 12, 2010, in order for the commissioners to hear testimony in support of the agreement and in response to the comments received by the Commission. Having considered the comments and the testimony at the hearing, the Commission found that further investigation was not warranted.

Based on the terms of the agreement, Wheatland was allowed to implement the rate increase in two phases. Phase one went into effect upon the issuance of the interim order. Phase two will go into effect one year later, on September 10, 2010. Overall, the average residential customer will see an increase of 7.3% or $6.62 a month.

Wheatland’s last rate case was in 1988. Since that time, the cooperative has incurred significant cost increases and changes to customer classes and cost structures, resulting in the need for increased revenue and changes in rate design.

A copy of Wheatland’s application, supporting testimony, the settlement agreement, and the order is available at: http://kcc.ks.gov/docket/cal.cgi?docket=09-WHLEE-681-RTS.

From the Iola Register

KANSAS HAS CHIPS in the energy bill being debated in Congress. If the law passed imposes costs on carbon emissions, the cost of generating power at the Jeffrey Energy Center near St. Marys, Westar North’s main plant, will rise. Kansans will pay more for power every month as a consequence.

At present, the rate increase would fall primarily on users in the north part of the state. The Wolf Creek nuclear plant at Burlington produces power for its retail customers, while most of Iola’s electricity comes from coal plants through the Kansas Power Pool. The Jeffrey plant emits about 16 million tons of carbon dioxide a year. Wolf Creek emits none.

Northern users are asking the Kansas Corporation Commission to equalize the rates between the two halves of the state to avoid disproportionate power rates across the state.

Regardless of whether the KCC will acceed to this request, what Kansas should focus on is the cost of climate control and ways to control that cost.

Three ways to control the amount of climate-changing carbon dioxide shot into the atmosphere are under consideration. Cap-and-trade legislation is under debate now. The House passed it; the Senate will consider it. Cap-and-trade requires power plants such as the Jeffrey Center to stop emitting or buy pollution credits from other plants. Under that law, Jeffrey will incur additional costs that would be passed on to consumers.

A simple carbon tax would be another way to go. Every emitter of carbon dioxide would pay an annual tonnage tax, providing a strong incentive to harness emissions.

The third and best solution is to reduce emissions to zero with non-polluting generation. In Kansas, that would mean more nuclear power, more wind turbines and more solar power.

THE PROSPECT of seeing the climate-control cost of coal-fired plants show up monthly on utility bills may change the power debate in Kansas.

For reasons unexplained, when building two massive coal-fired plants at Holcomb was under debate, lawmakers gave very little consideration to the impact that federal controls on carbon emission would have on the cost of power produced by Sunflower Electric there.

Not only was it likely then that the uncertain additional costs of taxing carbon emissions, directly or indirectly, would drive up the cost of financing the plants, it is almost certain today. Interest rates on the massive amount that must be borrowed for very long terms must be high enough to cover those unknown and unknowable costs.

What Kansas should do is find creative ways to build new nuclear plants, see that the power transmission network needed is built to open up the state to wind farms wherever they are feasible and encourage through tax incentives construction of solar and wind installations on a scale large enough to significantly reduce the need for coal-fired generation. Not just to slow climate change, but also to save every Kansas business and family from escalating power costs.

The handwriting is on the wall in grade school-language. Read it, Kansas lawmakers, and act.

Emerson Lynn Jr.

The Iola Register