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Kansas Enacts Renewable Energy Standard, Permits Disputed Coal Plant
TOPEKA, Kansas, May 22, 2009 (ENS) - Today, Governor Mark Parkinson signed legislation that establishes the state's Renewable Energy Standard and allows Kansans to generate their own power with renewable energy installations and sell back the extra electricity they produce to their utility through net metering.

The Renewable Energy Standards Act requires major Kansas utilities to generate 10 percent of their power from renewable sources by 2011, 15 percent by 2016 and 20 percent by 2020.

This legislation also sets a fuel efficiency standard for state-owned motor vehicles and an energy efficiency of state-owned and leased space and equipment.

Enactment of the legislation permits roll-out of an agreement reached earlier this month between the Parkinson administration and Sunflower Electric Power Corp. that allows the utility to construct a 895 megawatt coal-fired power plant with an unprecedented level of carbon mitigation beside its existing coal plant at Holcomb.

"Prior to this year, Kansas was falling behind many other states in the production of cleaner energy. More than two-thirds of the country had a Renewable Energy Standard, and Kansas was one of only six states not to allow net metering. With this legislation, we are no longer at the back of the line," Parkinson said.

"The nation's energy challenge provides the opportunities for a made in America energy program, and Kansas is ready to be a leader in that effort," said the governor. "We look forward to the new jobs, more wind power and the stronger economy that will be a result of this legislation."

The agreement with Sunflower ends a legal dispute that began in 2007 when Rod Bremby, secretary of the Kansas Department of Health and Environment, ruled that a planned expansion of the Sunflower Energy Holcomb coal-fired generating station could not proceed.

Despite the fact that the planned expansion "complied with all federal and state environmental laws and regulations," Bremby refused to grant the project's state air quality permit, citing concerns over potential future impacts of greenhouse gas emissions from the plant.

"I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing," said Bremby on October 18, 2007.

Sunflower employees pose for the camera in front of the existing coal-fired power plant in Holcomb, Kansas. (Photo courtesy Sunflower Electric)

After Bremby's ruling, the Kansas legislature passed four bills aimed at allowing the Holcomb project to continue. Each was vetoed by then-Governor Kathleen Sebelius, who is now serving as U.S. secretary of health and human services.

Project proponents argued that Bremby and the KDHE were attempting to change the rules in the middle of the permitting process. Legal challenges to the Sebelius administration's decisions were filed, and the positions of supporters and critics of the power plant expansion hardened.

Then Parkinson, who served as lieutenant governor under Sebelius, became governor on April 28.

On May 4, Parkinson announced that his office had reached a compromise with Sunflower that would allow the construction of one 895 megawatt coal-fired plant. The original proposal had been for two 700 megawatt coal-fired plants in addition to the coal generating station already operating at Holcomb.

Both the Kansas House and Senate approved a bill detailing the compromise on May 8. The Sunflower Electric agreement was contingent upon enactment of the Comprehensive Energy Package signed into law today.

The legislation gives a key concession to Sunflower by prohibiting the Kansas secretary of health and environment from imposing air quality standards that are stricter than the federal government's without legislative approval.

As part of the deal, Sunflower Electric has agreed to install updated pollution controls that will, among other reductions, ensure mercury emissions from the existing and new coal-fired plants do not exceed the total mercury emissions from the existing plant.

Sunflower will also build wind farms in Kansas equivalent to 20 percent of the net capacity of the new Holcomb power plant, use biomass to supply 10 percent of the heat to the existing Holcomb plant, and work towards other carbon dioxide offset and energy efficiency options.

Organized in 1957, Sunflower is a consumer-owned, nonprofit corporation operated cooperatively by six rural electric distribution cooperatives. Sunflower provides power to regional utilities in western Kansas and in 10 states. As part of the agreement with the state, Sunflower will build two transmission lines of at least 345 kilovolts to carry the electricity from the new power plant that will be sold to Colorado.

Sunflower Electric Power Corporation President and CEO Earl Watkins said, "This proposal meets the baseload needs of the region and will promote the development of renewable energy in Kansas. The proposal will allow our out-of-state cooperative partners to participate in the project in a smaller way while preserving the 200 megawatts needed by Kansas cooperative and municipal utilities. Agreement provisions for wind, biomass and transmission development will promote renewable energy development in central and western Kansas."

But the Sierra Club, Kansas Chapter, points out that these new laws are are not what they appear to be on the surface, saying, "What legislators giveth they taketh away in the fine print."

For each megawatt of renewable generating capacity that utilities install they get a credit of 1.1 megawatts toward compliance. So, the real standard is 9.1 percent by 2011, 13.6 percent in 2016 and 18.2 percent in 2020. "In other words they gave the utilities a 10 percent discount at the outset," the Sierra Club says.

Next, the legislation says that the enforcement agency, the Kansas Corporation Commission, must exempt a utility from penalties for noncompliance if the company can show that compliance in any year would raise rates by more than one percent.

The Sierra Club says this provision makes the act unenforceable.

Almost all the existing generating capacity in the rate base of major Kansas utilities was installed decades ago and is operated at two to three cents per kilowatt hour. New renewable generating capacity starts at five cents for wind farms with the production tax credit and goes up from there. It is inevitable that rates will increase more than one percent, the Sierra Club projects.

Net metering applies only to investor-owned utilities, not to cooperatives like Sunflower Electric or to municipally owned electric utilities. This means it will not apply to vast areas in western Kansas with the best wind and solar resources. "That's where people would most likely want to use net metering, and they can't," the environmental group says.

Governor Parkinson's settlement agreement allows Sunflower to file for another coal plant permit after April 30, 2011. The Sierra Club argues that this provision will retard the construction of new wind farms and utility-scale solar thermal power plants because they would be competing both in cost, and for transmission-line space against large coal plants.

"The renewable energy policies do not begin to match the concessions made to Sunflower," said Sierra Club spokesperson Stephanie Cole. "All of this is attached to a huge new coal plant that's going to result in massive amounts of new air pollution."

Copyright Environment News Service (ENS) 2009. All rights reserved.

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