Is coal-fired production of electricity on the rise or is it flaming out?

A recent report by The Associated Press described a nationwide wave of coal-burning power plant construction.

And that fits in with the plan by Hays-based Sunflower Electric Power Corp. to build an 895-megawatt unit in southwestern Kansas.

“Coal isn’t on the wane,” Earl Watkins, president and chief executive officer of Sunflower Electric, said this month after a public hearing in Garden City on the proposed plant.

Environmentalists, however, say the premise of the AP report is inaccurate.

“The coal plants that are being built today were permitted years ago when the outlook for coal was much more favorable than current conditions,” said Stephanie Cole, a spokeswoman for the Kansas chapter of the Sierra Club.

“Building a new coal plant today could be equated to making an investment in rotary dial landline telephones. Coal is yesterday’s fuel source,” Cole said.

Sunflower Electric is seeking a permit from the Kansas Department of Health and Environment for the project. Most of the electricity will be owned by Colorado-based Tri-State Generation and Transmission Association for sale to out-of-state customers.

“There are some 16 coal plants in various stages of construction right now,” Watkins said. “There are another eight to 10 that have just recently been permitted by other utilities across the country.

“Coal projects that are built for speculation are dropping off the table because no one wants to make that type of an investment without knowing they have a need,” Watkins said. “But all of the participants of this project are going to be displacing lost resources, like us, or displacing higher cost market prices, so they have got a revenue stream there.”

Coal-burning has been under fire for producing climate-changing carbon dioxide emissions. President Barack Obama’s administration has proposed regulating CO2. But the AP recently reported that the nation is seeing the largest increase in coal-fired plants in two decades.

More than 30 coal plants have been built since 2008 or are under construction at a cost of $35 billion, AP reported. Once on line, the plants will produce enough electricity to power 15.6 million homes, the equivalent to all the homes in California and Arizona, the report said.

In addition, the plants will generate 125 million tons of greenhouse gases each year, the equivalent of putting 22 million more automobiles on the road.

But Scott Allegrucci, director of the Great Plains Alliance for Clean Energy in Kansas, has a different view of the coal landscape, both nationally and in Kansas.

The number of plants recently built and being built now represent just a fraction of the 151 total plants that the federal government had forecast several years ago. Allegrucci says that shows “coal as an electricity fuel is on the wane.”

And while most of the coal plants have been canceled or put on hold, renewable energy sources have been developed at a record pace.

“So, since November 2008, not a single new coal plant has broken ground for construction, but record amounts of wind, solar, and other renewables are coming online,” Allegrucci said.

And he notes that in the Kansas proposal, Tri-State Generation and Transmission, which will buy most of the power from the proposed Kansas plant, hasn’t made a concrete commitment to the project, describing the plant as an option in Tri-State’s long range plans.

Another factor not mentioned in reports of coal’s rise is that some coal plants are being mothballed, said the Sierra Club’s Cole.

“Today we’re seeing more utilities announce retirement plans for existing coal plants than we are seeing utilities announcing plans to build new coal plants,” Cole said.

To the respected staff of the Kansas Department of Health and Environment:

Thank you for the opportunity to provide comments today.  My name is Scott Allegrucci and I am a third-generation Kansan. I am also the executive director of the Great Plains Alliance for Clean Energy, based in Topeka.

Our members appreciate, first, that the Kansas Department of Health and Environment plans to open a second public comment period for the draft permit in question. Obviously, since incorrect modeling data was filed, and since our engineers and consultants cannot review the full and accurate permit, we cannot speak directly to the technical aspects of the draft permit and what we expect will be bad news for Kansas air quality.  We will append our current comments with a more comprehensive and technical analysis once the draft permit is actually complete and accessible at KDHE. Today, then, we’d like to address another aspect of this project.

I come from a southeast Kansas working-class family. Early last century, many of my family members (and friends and neighbors) worked the coal mines in and around Crawford County. They were working with the technology and supplying the fuel of that era, and the Allegruccis have a long history of support for those industries as well as for the interests of working families across the state of Kansas.

Today, the organization for which I speak recognizes that Kansas needs jobs now and will likely need additional electrical power in the future. The real question is: What is the best way to create jobs and supply electricity for our economy?

Unfortunately, that question has been obscured by a false choice that has been foisted on Kansas by a powerful alliance of out-of-state, business, and political interests. That false choice is that we generate power and create jobs with another coal-burning power plant, just like we did last century – or, we do nothing.

The truth is that there is a better way to create jobs and supply power – especially in Kansas. A better way for Sunflower Electric Power Corporation to create more jobs over time, and create them sooner.  A way that develops Kansas’ native resources – especially natural gas and wind immediately.  A way that embraces the future, instead of clinging to the past, so that there will be good jobs for our children and grandchildren as well as for us, without jeopardizing the health and environment of all Kansans for generations.

I am submitting written testimony that substantiates this approach. There’s much more detail than time allows, but I will briefly share here today two examples of how Sunflower Electric could do this better for Kansans.

In August 2006, Westar Energy announced plans for two natural gas electricity production units at their Emporia Energy Center. The permits were granted in April 2007.  The first unit was complete and operational 13 months later.  The second came online a year after that.  The project was under budget, ahead of schedule, and operates at a higher efficiency than predicted.  At the peak of construction, almost 600 workers were employed.[i]

And the utilization of natural gas (a fuel Kansas currently exports) reduces carbon dioxide emissions by nearly 50% per BTU (as compared to coal), reduces the emissions of ozone precursors by even more, and nearly eliminates the dangerous particulate and mercury emissions that require the expensive and highly regulated technical controls that seem to have been problematic for Sunflower Electric’s initial modeling data.[ii]

About the same time, leaders in Nolan County, Texas, committed to developing their wind energy resources. In that one county, the wind energy industry has created more than a thousand jobs with a combined payroll of more than 45 million dollars a year. [iii][iv][v] Additionally, as you know, wind energy production emits no dangerous criteria pollutants, no greenhouse gas pollutants, no mercury, and requires none of our limited water resources to create electricity.[vi] [vii] [viii]

By contrast, nearly five years after the first version of this coal plant project was announced, Tri-State Generation &Transmission of Colorado (the entity that will own at least 80 percent of the proposed Holcomb coal plant), has publicly stated that the soonest construction would even begin for this plant would be 2016. [ix]

That’s a long time to wait for people who need jobs today.  Especially when we could have spent the last six years working together to create good, lasting jobs and industries built upon our own natural resources.

Of note, Tri-State’s own resource planning shows no need for baseload coal in their system until at least 2026.[x] So, it could be an even longer wait for those construction jobs.

Indeed, in 2004 Sunflower Electric had a permit in hand for the Sand Sage coal plant, and they chose to abandon that project.[xi] If jobs and energy production are the priorities, that project could already be providing both.

In Kansas we need to make the right choices, the smart choices, for both jobs and energy. That means developing our own native resources, both natural and human.

Kansas should not let itself be manipulated by Wyoming coal companies, a Nebraska-based railroad and a Colorado utility that all stand to make millions while Kansas is left with depleted water resources and air pollution that will poison our children and grandchildren.

In fact, Colorado-based Tri-State G&T has already funneled at least 52 million dollars to its Kansas partners to push this project,[xii] and we can find no indication that that substantial amount of money has yet to produce any jobs for Kansas workers.

Our members believe it is time to look to the future, and not to the past, and to look to Kansas and not other states, for energy generation and related economic development in Kansas.

Thank you for your diligence regarding this manner, and for the difficult work you do protecting the most precious assets Kansas possesses.

Thanks also to the Blue Valley School District and the staff of Blue Valley Northwest High School for allowing this venue to be used for such an important public event.

Scott Allegrucci

Great Plains Alliance for Clean Energy

220 SW 33^rd Street, Suite 200

Topeka, KS  66611

[ii] http://epa.gov/cleanenergy/energy-and-you/affect/natural-gas.html

[iii] http://www.cleanenergyfortexas.org/downloads/Nolan_County_case_study_070908.pdf

[iv] http://www.reporternews.com/news/2008/jul/11/nolan-county-economy-soars-wind-industry/

[v] http://www.sweetwaterreporter.com/content/view/100663/60/

[vi] http://www.awea.org/pubs/factsheets/EmissionKB.PDF

[vii] http://www.windpoweringamerica.gov/pdfs/policy/wind_air_emissions.pdf

[viii] http://www.epa.gov/cleanenergy/energy-and-you/affect/non-hydro.html#wind

[ix] http://www.forbes.com/feeds/businesswire/2010/05/27/businesswire140299764.html

[x] http://www.tristategt.org/ResourcePlanning/ResourcePlanDoc.cfm

[xi] http://www.kdheks.gov/download/Application_Timeline.pdf

[xii] http://www.tristategt.org/Financials/annual-report.cfm

In 2007, Kansas was temporarily in the world spotlight when Rod Bremby, secretary of the Kansas Department of Health and Environment, denied a permit to Sunflower Electric to build a new coal-fired generating plant in southwest Kansas.

The decision was so widely watched because it was the first time a permit had been denied because of the carbon dioxide a plant would emit; it declared carbon dioxide a health hazard.

Sunflower is once again looking to expand its generating capacity at Holcomb, this time seeking to build a far smaller, 895 megawatt plant, instead of the twin 700-MW plants it wanted to build a few years ago.

A public hearing on the proposal is scheduled for Wednesday at the Kansas Highway Patrol training center. The hearing will begin at 2 p.m., with a break from 5 to 6:30, then resume until everyone has an opportunity to speak.

During the 2008 legislative session, Gov. Kathleen Sebelius vetoed three different bills seeking to overturn Bremby’s ruling, but after she resigned to become U.S. Secretary of Health and Human Services, Gov. Mark Parkinson met with Sunflower officials and reached a compromise.

Included in that compromise, said Clare Gustin, Sunflower’s executive manager for external affairs, was a much smaller expansion, as well as a commitment from Sunflower to develop more renewable energy sources.

The plant is a joint project between Sunflower and Colorado-based Tri-State Generation and Transmission Cooperative.

Among those opposing the plant expansion is Scott Allegrucci, executive director of the Great Plains Alliance for Clean Energy.

Allegrucci says that while the new proposal is significantly smaller — and will create less carbon dioxide — most of the objections to the earlier proposal still hold.

This isn’t exporting wheat

Allegrucci says the bulk of the power generated by the new plant will be used in Colorado, with Sunflower customers getting just 10 percent.

He acknowledges that Kansas exports lots of stuff, such as wheat, but says this case is different.

“We’re not exporting power,” he said. “Sunflower isn’t making power and then selling it on the market — essentially we’re hosting a coal plant for an out-of-state utility … Tri-State doesn’t want to fight this fight in Colorado.”

And in spite of Gustin’s assurances that Sunflower is committed to developing renewable energy sources, Allegrucci says the expansion would make it more difficult for wind and solar projects to gain a foothold.

“An overbuild of this size would flood our grid with coal-generated electrons, making (renewables) that much less economically feasible,” he said.

Why not natural gas?

He also questions why Sunflower wants to use coal to power the generators, saying he thinks natural gas would be better for a number of reasons.

“We have natural gas in Kansas, and they could be using that and keeping the money in Kansas instead of buying coal from Montana,” Allegrucci said. “Even if gas prices go higher, at least the money would be staying in Kansas.”

Gustin says choosing coal over natural gas is a sound business decision. Utilities typically use coal for so-called “base load,” because coal-fired plants must run constantly, and use gas-fired plants — which can be turned off and on almost at will — to handle peak loads only, because gas is more expensive.

“We’re not just biased toward coal,” she said, adding that the expansion is a 30- to 40-year investment, and that the company thinks coal prices will be more stable over that time.

Who will buy the power?

Allegrucci also says the plant isn’t needed now, even by Tri-State, and that Tri-State’s own projections say it won’t need the power until 2026.

But Gustin says a contract Westar has to buy 174 MW of power from Aquila expires in 2018, and Westar will need to get that power from somewhere else.

Allegrucci also said it’s possible the federal government might step in to stop the plant expansion, even if state officials approve it.

In 2007, the U.S. Supreme Court ruled that the EPA could regulate carbon dioxide, and Allegrucci said the agency intends to start doing just that beginning in January.

Exactly how that regulation will unfold remains to be seen, Allegrucci said, adding that the EPA has already required one plant in Kentucky to use natural gas instead of coal, because it creates less carbon dioxide.

“Basically, Sunflower is racing to get their permit before January 2011,” he said.

Community Bridge opens this week with Stephanie Cole, Kansas Sierra Club, and Scott Allegrucci, Great Plains Alliance for Clean Energy, in a discussion of the public hearing process for Sunflower Electric’s proposed 895-MW coal plant in Holcomb.

While many may think this is a done deal because 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, 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. Making the up-coming public comment time and public hearings worth paying attention to.

Recently, Physicians for Social Responsibility issued a report showing that coal emissions contribute to four of the five leading causes of death in this country. That means that although Sunflower claims this plant will be the “cleanest in the country,” if it is built, Kansans will be at an increased risk for heart disease, cancer, stroke, and lower respiratory diseases, such as chronic bronchitis and emphysema. So although Colorado is poised to get 80 percent of the energy produced by the plant, Kansas will be stuck with 100 percent of the pollution and 100 percent of the health risks.

The public comment period for Sunflower’s Holcomb Station coal plant is open from July 1 – August 15. Public comments can be submitted to KDHE anytime during that period. Public hearing will be held on:

• August 2 in Overland Park at 2:00 PM Blue Valley Northwest High School (135th and Switzer)
• August 4 in Salina at 2:00 PM Highway Patrol Training Center Auditorium (2025 East Iron)
• August 5 in Garden City at 2:00 PM Garden City Community College Joyce Auditorium (801 Campus Drive)

Hearings will break at 5:00 PM and reconvene at 6:30 PM, continuing until all verbal and written comments have been submitted. For more information, visit KDHE’s Website.

To listen to the podcast, click here.

The Kansas Department of Health and Environment released the schedule for the public comment period and hearings on the proposed Holcomb coal plant project. The comment period begins today, July 1, and ends August 15 (which means that comments can be submitted directly to KDHE outside the public hearings any time during this period).

Three public hearings have been scheduled for the first week of August:

• August 2 in Overland Park at Blue Valley Northwest High School
• August 4 in Salina at Highway Patrol Training Central Auditorium
• August 5 in Garden City at Garden City Community College Joyce Auditorium

Each hearing will begin at 2:00 PM. Hearings will break at 5:00 PM and reconvene at 6:30 PM, continuing until all written or verbal comments have submitted.  Note that the hearings start in KC and move west to Garden City.

You may see public statements indicating the “issuance of a draft permit” – this is technically correct, but misleading.

KDHE has issued a draft permit that is now the subject of the public comment process.  As with the previous process in 2007, that draft permit can be altered or amended at any time by KDHE or EPA, right up until the very end of this process.  It can also be denied.  The public comment period could also be extended if necessary.

GPACE will be posting more information in the coming days that can help inform your comments, including topical fact sheets about the impacts of the proposed coal plant project.  A form is up on our website now that allows citizens to submit comments which we will then deliver to KDHE. This form is at http://www.gpace.org/publiccomment/.

And next week keep an eye out for the first e-newsletter from GPACE with information about the proposed coal plant project, the public comment process and hearings, and breaking news and information about this entire process.

Again, please be on the lookout for more information in the next few days, and mark you calendars for these hearings.

Many Thanks,

Scott Allegrucci

Director

TOPEKA — A measure tucked into the state budget could prevent Kansas from implementing Environmental Protection Agency rules on greenhouse gases.

The proposal was shepherded through by Sen. Tim Huelskamp, R-Fowler, during the final days of the legislative session that ended last week.

“Instead of supporting sound science and common sense, the EPA has chosen to take the radical path of attempting to regulate carbon dioxide and methane,” said Huelskamp, who also is running for the 1st District congressional seat, currently occupied by Jerry Moran.

“I’m determined to do what is best for our Kansas economy, and that is to oppose the EPA implementation of their cap-and-trade regulatory scheme at every possible opportunity,” he said.

The amendment to the appropriations bill would prohibit any state agency from spending state funds “to plan, draft, propose, promulgate, finalize or implement any rules and regulations pursuant to the Clean Air Act involving the greenhouse gases identified” in the EPA’s endangerment finding.

EPA has declared that climate-changing greenhouse gases endanger human health and welfare and need to be regulated. Those gases include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.

The Kansas Department of Health and Environment, which enforces environmental rules, is the target of the amendment, and a major issue before KDHE is a pending permit for an 895-megawatt coal-fired electric power plant in southwest Kansas, known as the Sunflower Electric Power Project.

In 2007, KDHE Secretary Roderick Bremby denied the permit for the project, citing the effects of the proposal’s potential carbon dioxide emissions on health and environment.

In 2008 and 2009, Sunflower Electric and Colorado-based Tri-State Generation and Transmission Association, which would own most of the power from the project, pushed through legislation to overturn Bremby’s decision. Then-Gov. Kathleen Sebelius vetoed that legislation several times.

When Mark Parkinson became governor in 2009, after Sebelius’ departure to join President Barack Obama’s Cabinet, Parkinson made a deal with Sunflower and Tri-State to build a smaller project.

The amendment to the budget bill is now in the hands of Parkinson, who can let it become law or apply a line-item veto to it. Parkinson’s office said the governor has not yet received the appropriations bill but that once he does he will thoroughly consider every proviso before taking any action.

Environmentalists are unhappy with the amendment but, ironically, they are not asking for Parkinson to veto it.

Given Parkinson’s deal-making with Sunflower on the coal plant, they don’t see much help coming from the Statehouse.

“At this point, we’re not inclined to use the legislative process to combat these special interests anymore,” said Stephanie Cole, a spokeswoman for the Kansas chapter of the Sierra Club. “The legislative process is being abused. We will focus on the Sunflower project in the courts.”

Scott Allegrucci, director of the Great Plains Alliance for Clean Energy, said the provision wouldn’t stand up in court and probably would invite more scrutiny from the EPA on Kansas environmental regulation.

“We might consider more direct oversight by EPA a much more responsible and dependable pathway to regulatory certainty in Kansas,” Allegrucci said.

EPA’s Regional Administrator Karl Brooks has already written a letter to Parkinson and Bremby expressing concerns about any provision that would block federal rules.

In that letter, Brooks warns that if a state doesn’t follow federal pollution laws, the EPA will exercise its authority to make sure that projects seeking permits adhere to federal requirements.

This public resource planning process that Tri-State is undergoing was brought about as part of a settlement agreement primarily involving the Colorado Public Utilities Commission, Colorado Governor Ritter’s office, Western Resource Advocates, and Tri-State, whereby an existing docket to consider PUC regulation of Tri-State was closed without action in exchange for this public resource planning process.

The process is non-binding; that is, Tri-State is not obligated to accept any of the recommendations or answer public questions, but it does provide a forum for important public information and scrutiny of Tri-State’s resource planning.

Tri-State has no member coops in Kansas, so why is the resource planning process of a Colorado-based rural electric coop of interest or importance to Kansans?

Recall that it was in response to an RFP for baseload capacity from Tri-State that Sunflower Electric (in Kansas) let their permit for the 660mw Sand Sage project expire (after the initial granting and an extension) and began the process of putting together the current plan to build three huge additional coal plants at Holcomb for out-of-state utilities.  So far as we know (the details have not been discussed since rural electric coops do not have to allow public or regulatory review of their plans) Tri-State would be the equity owner of 80% of the electric power produced by the proposed 895mw coal-fired plant at the Holcomb Station, and they would own 80% of the equity value of the plant.  Beyond that, not much is known about the details of the business arrangement between Tri-State and Sunflower regarding the proposed plant, or any future development at Holcomb.

We do know that Tri-State reps recently acknowledged in one of the public meetings that they currently have developed no transmission plans for Holcomb – which seems to be at odds with claims by Sunflower and Holcomb supporters in Kansas that the plant is critical to transmission for wind energy.  That fact is also seemingly not in compliance with the settlement agreement between the Governor and Sunflower, which calls for transmission to be built.

Tri-State is also on record stating that they do not see the Holcomb coal plant as a near term baseload solution under any circumstances, which again, is at odds with claims by Sunflower and Kansas coal supporters that the plants will start construction within a year and employ people to combat the recession.

And, Tri-State’s own load forecasts acknowledge that they do not have near-term need for the baseload capacity represented by the proposed Kansas coal plant.

Yet, their 2009 annual report shows that they have spent $51.3 million, excluding the cost of land and water rights, developing the units at Holcomb as of December 31, 2009.

So, what’s currently happening at the Tri-State public resource planning meetings (and the ultimate outcome of their resource planning process) will have a tremendous impact upon Kansans, since the fate of the proposed 895mw coal-fired plant, and the possible addition of two more huge coal plants as part of the proposed Holcomb Station expansion, may be impacted.

Even if you can’t attend the May 19th meeting near Denver, Kansans can register and participate in the public meeting via webinar here.

Scott Allegrucci

Executive Director

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

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?

The most pressing issues at stake in this debate are not whether one, two, or three new coal plants are permitted for Sunflower Electric. To be sure, the current agreement will saddle Kansans with serious economic, environmental, and energy policy liabilities. With this deal, we consign to our children and future generations of Kansans huge financial risks, adverse health impacts, environmental damage, and resource depletion. If it ever becomes more than paper.

And there could be potentially devastating impacts on Finney County should this one basket carrying so many of their eggs get dropped on the long legal, regulatory, and financial road ahead.

However, there are two more immediate problems with this agreement:

First, the “let’s-make-a-deal” signal it sends to anyone with the money and influence to get a private audience with Kansas elected officials is damaging to the credibility of our state government, and to the trust we must place in it.

Second, by punting on third-down, the governor surrendered the chance to bargain for better policy. He and key state legislators have conceded that they do not have the ability to create good energy policy for Kansas and are now leaving it up to the federal government and multi-national institutions to decide our energy fate.

At this juncture, the feds will make policy from a regional and national perspective that disadvantages Kansas, since states around us are better positioned for federal partnership and private investment.

“Something”, in terms of renewable energy in Kansas, may be better than “nothing.” But good policy is also much better than bad policy. The only people truly happy with this deal are those positioned to profit from the plants and from reduced health and environmental accountability in Kansas.

But in the end, the fate of the proposed coal plants will not (cannot) be decided by our governor or our legislature. The regulatory, legal, and economic uncertainties surrounding coal plants are playing out at a level well above their heads. The bummer is that legislative supporters of the coal plants wasted at least two critical years settling a political score under the capitol dome, when they could have been crafting real energy and economic policy that put Kansas at a competitive advantage nationally and put Kansans all across the state back to work. This governor gave them that political “victory” in return for little of real value…at least to most Kansans.

Our leaders have left Kansas with poor field position in the renewable energy game, but it is better than it would have been without the efforts of advocates statewide. Now we have to keep our eyes on the goal line.

Scott Allegrucci
Director, Great Plains Alliance for Clean Energy