Recently a US District Court judge ruled against the Rural Utilities Service (RUS) of the United States Department of Agriculture (USDA) and Sunflower Electric Power Corporation (Sunflower) regarding legal action brought by Sierra Club.  This decision is potentially a significant setback for the proposed Holcomb Station coal-fired expansion project.  If it stands (and it probably will), RUS violated federal law to aid Sunflower and its out-of-state partners.

True ownership of the project belongs to Tri-State Generation & Transmission Association (Tri-State), the Colorado utility that is bankrolling it. The unit is designed to generate electricity for Colorado and the Western grid that won’t be available to Kansas without expensive conversion technology.  So even though Sunflower is the holder of the permit, it can’t own the Holcomb coal plant because it’s in such terrible financial shape, largely from over-building its existing coal-fired capacity with taxpayer money that it has never paid back.

As a result of that blunder, and in exchange for a bailout to the tune of hundreds of millions of dollars courtesy of American taxpayers, Sunflower had to give RUS/USDA significant oversight and involvement in its capital expenditures and expansion plans. American taxpayers are essentially shareholders in anything Sunflower does from now on, due to that debt restructuring.

But RUS let Sunflower and Tri-State move forward on the proposed project without complying with required federal law and regulations.  RUS and Sunflower put shareholders (taxpayers) at risk by violating federal law and avoiding environmental review, compliance, and public input regarding the proposed coal-fired expansion.

Ever vigilant, Sierra Club and Earthjustice filed legal action against RUS for the infraction.  Sunflower intervened in the suit, and last month a federal district court agreed, finding that RUS and Sunflower violated the law.

Facts Don’t Concern Our Congressional Representatives

Now, the pro-coal cabal is trying to pressure RUS to appeal the federal court decision, rather than to settle and move on.  With Rep. Huelskamp in the lead, the Kansas Congressional delegation released an inaccurate public statement about the case, and sent a letter to USDA and the Department of Justice (DOJ) attempting to put political pressure on the administration.  Recognizing that the case may set a legal precedent in the public’s interest, jeopardizing the flow of taxpayer pork to coal-dependent polluters, utilities have undertaken a campaign of direct political pressure on RUS.

This current effort comes on top of previous pro-coal campaigns to misinform the public and apply political pressure on the regulatory process in Kansas.  In his zeal to bash EPA and the very notion of climate change Huelskamp nearly torpedoed the coal plant with ill-conceived and over-reaching legislation as a state senator.

The recent letter sent to USDA Secretary Vilsack and US Attorney General Holder from the Kansas Congressional delegation is referenced in official press releases and media reports, and was initially linked from Huelskamp’s website.  Curiously the letter is no longer available for public review through any of those sources.

But GPACE obtained a copy of the letter and found it completely counter to the actual facts on the ground about energy, pollution, and economic impacts of the project, as well as the legal and financial realities of RUS responsibilities regarding Sunflower and other utilities.

In a particularly dishonest bit of fear mongering, the Kansas delegation blames Sierra Club for “rolling brown outs” in western Kansas, and labels Sierra Club’s concern for the rule of law and long-standing public health and environmental protections as a “special interest” at odds with the American people.  And despite Sunflower’s dubious financial history and federal government-taxpayer bailout, the Kansas delegation wants RUS to treat the utility as a solvent and responsible financial interest.  This is the same utility that in 2007 described itself as a “wounded deer laying in the middle of the highway.”

A follow up letter from Sierra Club to Secretary Vilsack helps set the record straight(er).

Seems Like the Delegation Protests Too Much

Setting aside the inaccuracies and misinformation throughout the letter from the Kansas Congressional delegation to USDA and DOJ, it reveals another terrific irony and stunning inconsistency (in a saga filled with them).  Huelskamp and colleagues claim they want the Sunflower/Tri-State coal plant built as soon as possible.  However, their letter to Sec. Vilsack clearly states that the Kansas delegation wants RUS/USDA to appeal the federal court ruling, creating a long and expensive legal process that would…wait for it…delay the project even further.

That’s right, even as they publicly attack environmentalists for delaying the coal plant, claiming the jobs are desperately needed, the Kansas Congressional delegation is asking RUS to engage in actions that will delay the coal plant.

Since Tri-State doesn’t need the electricity and doesn’t plan to start construction for at least five years, project supporters may be trying to delay construction of this unneeded coal plant, hoping it might be needed sometime in the future.  All while blaming project opponents, environmentalists, and the federal government for the delay.  In fact, Tri-State has never disputed or denied repeated public reports that it had pushed back construction of the coal plant until 2016 at the earliest, reports that surfaced long before the recent court ruling regarding RUS and well before the Kansas Department of Health and Environment (KDHE) granted a permit for the project, triggering legal challenges.

Delay, it seems, is now the desperate tactic of Sunflower, Tri-State, and their political allies.

In another interesting twist, the permit granted by KDHE to Sunflower requires (under federal law) that substantive construction begin within eighteen (18) months of the date of the permit issuance.  It will be interesting to watch the special interest money, misinformation, and political pressure deployed by pro-coal shills in an attempt to subvert that law before May of 2012.

What Next?

Parties meet with the federal judge this summer and he will later issue a decision regarding appropriate remediation.  RUS and Sunflower could be required to go back and do the whole Environmental Impact Assessment (avoided previously), including a federal public comment process and information about environmental and public health impacts that were ignored or suppressed by the highly politicized and corrupted Kansas permit process.

In the meantime, you might want to let RUS and USDA know that, if the Holcomb coal plant is such a good idea, it shouldn’t require a special interest campaign of political pressure and misinformation, taxpayer bailouts, and continued violation of federal laws designed to protect the general public just to stay viable.

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Ideologues tend to get their blinders on, and politicians like to pander to their base. That explains why State Sen. Tim Huelskamp, R-Fowler, sought and won a provision in the state budget to bar use of state money for implementing federal greenhouse gas regulations.

It was a mostly pointless effort but one Huelskamp probably thought principled and one that would serve the interests of anti-environmentalism rhetoric that would please his conservative base.

It seemed like poetic justice, then, when that very budget provision appeared likely to backfire on Huelskamp, imperiling the Sunflower Electric coal power plant project so important to western Kansas and to conservative, pro-coal legislators. An Environmental Protection Agency administrator expressed concern about the language of the Huelskamp amendment, communicating to the Kansas Department of Health and Environment that if Kansas lacked authority to apply federal requirements, then the EPA could exercise its oversight authority.

In other words, an effort to block EPA regulation actually could have had the effect of inviting more. If the KDHE wasn’t going to regulate air pollution, then the EPA would be forced to do so. And with the way paved with KDHE to approve air permits for the Sunflower Electric expansion of its Holcomb power plant, having the EPA in the mix would have been a concern.

Fortunately, Gov. Mark Parkinson signed the budget bill Thursday but removed that provision along with 10 others he found objectionable or problematic.

Sunflower Electric President Earl Watkins had written to the governor, urging him to remove the budget provision. Westar Energy also wanted it removed.

Huelskamp, however, stuck to his guns, saying Kansans wanted to “combat (President Barack) Obama’s cap-and-tax proposal and resist an out-of-control EPA.”

Conservative politicians will say whatever they think their base wants to hear these days. In the process, they will take empty symbolism over real results. Same goes for trying to pass worthless state legislation to protest federal healthcare reform or saying if you get elected to Congress you will get “Obamacare” repealed.

In the case of the EPA language in the budget bill, it would have been ironic symbolism had that resulted in more, rather than less, EPA regulation and new delays to the Sunflower Electric project.

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TOPEKA — Gov. Mark Parkinson on Friday was at war again with the Kansas Chamber of Commerce.

“I find myself once again completely dismayed at the behavior of the Kansas Chamber of Commerce,” Parkinson said in a news release shortly after the Legislature adjourned the 2010 session.

On Thursday, Parkinson made a line-item veto of a provision in the state appropriations bill that would have prevented the state from spending money to enforce potential regulations on greenhouse gas emissions, which scientists have linked to climate change. The measure was authored by state Sen. Tim Huelskamp, R-Fowler, who opposes federal regulation of carbon dioxide emissions.

Parkinson said the provision would have caused a lot of problems, including the possibility that the federal Environmental Protection Agency would take over environmental regulation in Kansas. Three of the state’s largest utilities, including Westar Energy, KCP&L and Sunflower Electric, contacted Parkinson and asked that he veto the provision.

“The Huelskamp proviso was bad public policy. Therefore, I vetoed it, Parkinson said.

But the Kansas Chamber didn’t agree. Jeff Glendening, vice president of political affairs for the Kansas Chamber of Commerce, said of the veto: “We are disappointed to see the governor veto the Huelskamp EPA amendment. The real beneficiaries of today’s veto are radical environmentalists. We salute Senator Huelskamp’s efforts and thank him for offering this amendment on behalf of Kansas businesses.”

Parkinson responded, “I would expect that the Chamber would be thankful that the wishes of its members — companies which employ hundreds of Kansans, contribute to our economy and keep our lights on — were met,” he said. “But instead, they reacted with another political attack and categorized their own members, who were the ‘real beneficiaries’ of this veto, as ‘radical environmentalists.’ ”

Parkinson said the chamber’s rhetoric could hurt Kansas in recruiting business.

“Businesses expect the state chamber to be a common sense, balanced entity. Instead, it has become a partisan political machine that is counter-productive to our efforts to create jobs, grow the economy and move Kansas forward,” he said.

During the legislative session, Parkinson blasted the chamber, which opposed increasing the state sales tax.

Parkinson and a bi-partisan coalition of legislators pushed through a 1-cent increase in the state sales tax, saying it was needed to protect schools, public safety and social services.

Chamber President Kent Beisner said those who supported the tax increase “catered to the needs of those at the government trough.” At the time, Parkinson responded, saying, “It is heartbreaking to think that somebody would equate the disabled, the elderly, school children, veterans, law enforcement and the poor to pigs at a trough.”

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by Leslie Berliant - May 26th, 2010

A last minute amendment to the Kansas budget bill seeks to bar the Environmental Protection Agency (EPA) from regulating carbon dioxide linked to global warming in that state. If adopted, the effort — led by Republican State Sen. Tim Huelskamp — could quickly turn into a lesson in unintended consequences.

Observers say the poorly written measure could end up giving the EPA unprecedented oversight over coal permitting and other regulation of utilities in Kansas, at a time when fossil fuels are under political attack in Washington.

The issue has sparked outrage on both sides of the aisle. But perhaps the most worried are backers of Sunflower Electric Corp.’s proposed coal-burning facility. The plant is two years from breaking ground in the town of Holcomb, and the EPA still must approve its revised permit application.

Supporters had hoped for a 2010 greenlight from EPA. But in a May 18 letter to Kansas Gov. Parkinson, Sunflower CEO L. Earl Watkins, Jr. warned that the new budget amendment could delay the permit until after the 2011 deadline for the EPA to issue its “tailoring rule.” The rule is expected to outline what sources of carbon emitters will be regulated, and it could put the plant in jeopardy.

“Under the budget bill, if KDHE [Kansas Department of Health and Environment] staff is prohibited from addressing GHG [greenhouse gas] regulations, they could be forced to delay issuing permits on large projects until FY 2011 is expired,” the letter said. “Otherwise, EPA would step in and implement the GHG piece of the CAA [Clean Air Act], or simply refuse to allow KDHE to issue permits for which GHG regulations would apply.”

Measure Revives Long-Running Battle over Holcomb Plant

The controversy marks the latest chapter in a three-year struggle between lawmakers, environmental advocates and utilities over new coal-fired construction in Kansas.

In 2007, the proposed 2,100-megawatt Sunflower coal facility in Holcomb, some 60 miles from the Colorado border, became the first in the nation to be denied an air permit by a state agency based on potential dangers that greenhouse gas emissions pose to human health and the environment.

After four follow-up attempts by the Kansas legislature to push through plans for the two large coal plants — and four vetoes by then Gov. Kathleen Sebelius — the Sunflower saga finally seemed to be drawing to a close last May, when a backroom deal was brokered between the utility and the current governor, Mark Parkinson.

The agreement gave Sunflower the greenlight to build a smaller 895-megawatt plant at the site.

But now the state legislature appears to be back at it. And this latest attempt to intervene in the coal plant’s fate may have fractured a key relationship between Sunflower and one of its chief advocates, State Sen. Huelskamp (picture).

Huelskamp, a Republican who is also running for Congress in the Kansas 1st District, added a late amendment to the budget bill that would prevent any state agency from spending money “to plan, draft, propose, promulgate, finalize or implement any rules and regulations pursuant to the Clean Air Act [CAA] involving the greenhouse gases identified” in the EPA’s endangerment finding.

In stripping the Kansas Department of Health and Environment (KDHE) of its right to control global-warming pollution, observers say, EPA would get that authority instead.

The move would have negative consequences for all utilities in Kansas, including Sunflower. The odd twist to the story is that Huelskamp has long been a vocal supporter of Sunflower and has received campaign contributions from the utility.

Opponents of the amendment, which now include Sunflower and Westar Energy, another Kansas utility, agree it paves the way for the EPA to take over the permitting process for new coal plants in Kansas. Fearing “regulation overkill” from the feds, they have asked Governor Parkinson to use his line item veto power to kill the amendment.

The budget hit Parkinson’s desk last Tuesday. He now has until Friday to use his authority to remove the controversial measure. At this late stage, its fate remains uncertain.

According to Stephanie Cole, a spokesperson for the environmental group Sierra Club, many in Kansas believe Parkinson will veto the amendment, but there is no guarantee.

“Parkinson has been unpredictable in terms of his energy and environmental policy,” said Cole. “He’s somewhat of a wild card.”

The Clean Air Act Enters the Mid-Term Elections

For the Sierra Club and other environmental groups largely on the sidelines of the dispute, the purpose of the amendment is hazy. According to Cole, what is clear is that it’s a “risky” political tactic on the part of Huelskamp.

“There is speculation that this could simply be a political move to boost [Huelskamp's] campaign,” Cole said.

“However it’s a very risky move if the goal is to please those who want the coal plant built. While he is describing the EPA as radical, this very amendment could lead to more EPA oversight. It’s a very risky strategy that could backfire.”

Scott Allegrucci, executive director of the Great Plains Alliance for Clean Energy (GPACE), a Topeka-based nonprofit group, agrees that the amendment may have been politically motivated.

“You have to consider that there is an egregious amount of pandering to the far right,” Allegrucci said. “In Kansas we have three parties — Democrats, moderate Republicans and conservative Republicans. The most vitriol is between conservative and moderate Republicans.”

One of Huelskamp’s opponents in the Congressional primary, Rob Wasinger, another Republican, is already making the potential EPA takeover of the state permitting process a talking point in his campaign. He has been accusing Huelskamp and Jim Barnett, who is also running in the primary and has not come out for or against the amendment, of political grandstanding.

Paving the Way for an EPA Takeover in Kansas: Why Utilities are Opposed

Amanda Goodin, an attorney at Earthjustice, a California-based law firm, says the amendment is consistent with legislation coming out of Kansas that aims to circumvent the EPA. But it goes much further by revoking all Kansas authority to administer the CAA under its state implementation plan.

Instead, it would leave the EPA as the direct enforcer and issuer of air permits. This is a situation, Allegrucci says, that both state rights advocates and emitters don’t want to see happen.

“There are all sorts of regulatory and litigation implications,” he says.

According to Cole, federal standards will be enforced in Kansas one way or another, if the past provides any indication. When state agencies previously have been denied this authority, she said, the EPA has stepped in.

“The last time the legislature passed legislation that restricted Secretary [Roderick] Bremby [of KDHE] with a provision that restricted KDHE from enforcing regulations stronger than any federal guidelines, the EPA stepped in,” Cole said.

“It would seem that we are taking a gamble again. Once again the state is risking the EPA stepping in and taking over the state’s control for regulating air quality.”

Clare Gustin, vice president of member services and external affairs for Sunflower, says that the company did not know about the amendment in advance.

“We believe there are some unintended consequences and that there may be some confusion about the status of greenhouse gas regulations and how that impacts all sources of greenhouse gases,” Gustin said.

Watkins, Sunflower’s CEO, likewise recognized the bill’s unintended consequences in his May letter to the governor.

“We appreciate the effort of the Kansas legislators to protect Kansas companies from additional regulation. But additional regulation through the Clean Air Act should not be ignored,” he wrote.

The Intent Behind the Amendment

Allegrucci doesn’t believe that Sunflower was unaware of the amendment in advance. He believes that they simply miscalculated.

“Sunflower’s fingerprints have been on every single piece of legislation that has to do wtih air quality,” Allegrucci said. “I find it difficult to believe that given the amount of money and staffing that Sunflower and their allies have applied to this fight that they didn’t know anything about this amendment.”

Huelskamp’s office did not return SolveClimate’s request for comment, but the Kansas Liberty newspaper quotes Huelskamp as saying that he was determined to “oppose the EPA implementation of their cap-and-trade regulatory scheme at every possible opportunity,” although the EPA does not currently implement any carbon trading mechanism.

Huelskamp also referred to the EPA as “radical” in a Lawrence Journal World article.

Sources say that upon adding the amendment in a late-night budget session, Huelskamp mentioned Sunflower and its regulatory struggles several times during his remarks. Sunflower has been saddled with massive debt to Kansas taxpayers. At one point the figure was upwards of $1 billion. The utility still owes $200 million to the Rural Utilities Service (RUS) for its previous coal plant.

Current permitting costs, as well as the pricey legal and legislative battles to get approval for the new Holcomb-based coal plant, have been bankrolled by Colorado utility Tri-State, which will own 80 percent of the plant and its energy output, says Allegrucci.

“The coal plant is Tri-State’s, not Kansas’…Presumably, they don’t want to face the regulatory hurdles and citizen opposition in Colorado,” said Allegrucci, adding that Tri-State is “funneling tens of millions from out of state to fight that battle.”

While Sunflower is now fighting the amendment, Allegrucci said the intention of the measure may have been to help the company more easily build new coal plants, in the wake of its third RUS restructuring in 2002.

“Under current restructuring, Sunflower is incentivized to build three massive coal plants in Holcomb,” he explained.

“In some ways, the worst possible outcome for Sunflower could be one 900 MW plant which is 80 percent owned by a Colorado utility. It’s always been about a three-plant expansion. They are so in debt that they can’t stop [at the 900-megawatt plant]…We have to consider that the intent may have been to clear the way for future power plants from Sunflower.”

Cole agrees with that assessment.

“In the settlement agreement it states that Sunflower is not allowed to submit an application for any additional coal plants until April 30, 2011,” she said. “However, at one point they were proposing 2,100 megawatts. That’s greatly more than what they need. Clearly, Sunflower has a desire for hosting coal capacity for out-of-state utilities as it’s becoming more difficult to build coal in other states.”

The settlement agreement made between Gov. Parkinson and Sunflower, which approved the smaller plant has been questioned on grounds that the governor may not have had the authority to broker the deal and issue the necessary air permit.

In fact, the EPA stepped in last July and mandated that Sunflower resubmit its request for a permit. The agency also said that Kansans should be given an opportunity to participate in public hearings. KDHE is in the midst of that process, and despite Sunflower’s confidence about the permit, it still must be approved by the EPA.

Allegrucci says that the irony is that if Sunflower and the legislature had not tried to circumvent KDHE through the legislative process in the first place, they might already be through the prescribed regulatory and judicial process for reevaluating a permit denial.

“As a citizen of the state, what’s sad is that this is the third year in a row that Sunflower’s political allies have done whatever they want to do with the legislative process in Kansas in an attempt to host an unnecessary, polluting coal plant that benefits Colorado,” he said.

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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.

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