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EPA rules put Holcomb plant in doubt

Clean power plan makes it less likely controversial Kansas coal plant will be built

By Bryan Thompson | August 11, 2015

EPA rules put Holcomb plant in doubt
Photo by Bryan Thompson Sign at the entrance to the Holcomb Generating Station, where the proposed expansion remains a plot of bare dirt.

The Clean Power Plan recently announced by President Obama and the Environmental Protection Agency is designed to reduce greenhouse gas emissions from power plants by almost one-third over the next 15 years. Tucked into the plan’s thousands of pages is language that makes it even less likely that a new coal-fired power plant will ever be built in southwest Kansas.

For 15 years, Hays-based Sunflower Electric Power Corporation has been trying to expand its coal-fired power plant near Holcomb. But even though the project has been designed and redesigned, for a variety of reasons the site is still just bare dirt. And with the new federal greenhouse gas rules for power plants, there’s serious doubt that construction will ever take place.

“Long-term either way, there will not be any new coal plants built in Kansas, and Holcomb 2 is dead, other than getting an official stamp on it,” said Bill Griffith, energy chair for the Kansas Sierra Club.

The Holcomb expansion was approved in 2010 as part of a compromise that also included the establishment of the state’s renewable energy standards. Legislators softened those standards to statewide goals during the 2015 session.

Sunflower officials say they’ve not abandoned the project and a multi-state legal challenge to the new EPA rules is still pending. But if the federal regulations survive the courts any new coal-fired power plants would likely have to employ expensive technology to trap carbon emissions and store them underground. That would make them less cost-competitive than cleaner energy sources like natural gas, wind and solar.

The EPA’s new rules for power plants are intended to curb the greenhouse gas emissions that scientists worldwide have tied to global climate change. They cover more than 3,000 pages, and for the first time the rules say that if the Holcomb plant is ever built, it would likely be regulated as a new plant, rather than an existing one.

That distinction makes a big difference.

“It matters a lot whether Holcomb is classified as a new or an existing power plant,” said attorney Anna Sewell, with the environmental law firm Earthjustice. “As a new source, Holcomb would have to have absolute limits in its operating permit on the amount of carbon dioxide that it can emit.”

The limits in the final Clean Power Plan are not as strict as those in the version originally proposed last year. But Sewell said the slight increase in allowable emission won’t likely matter. That’s because, as designed, the Holcomb facility would be by far the largest carbon dioxide emitter in Kansas.

“Holcomb would have a very hard time meeting that limit, unless it used something like carbon capture and sequestration (CCS) technology, which is very expensive, and which Sunflower has not proposed using for Holcomb,” said Sewell.

The new plant might still be viable if Sunflower officials could convince the EPA to treat the expansion of their Holcomb generating facility as an existing plant. That would allow state environmental officials flexibility to meet a statewide emissions target without imposing a firm limit on the new plant.

“So, for example, if Holcomb 2’s emissions are too high to meet the existing source standards, Kansas can offset those emissions with other things like new renewable resources, or new energy efficiencies,” said Sewell.

Sunflower officials had argued that all of the design and engineering work that has already gone into planning the expansion made it an existing plant. But the EPA appears to have rejected that argument, stating in reference to Holcomb and two other plants, that the agency is “unaware of any physical construction activity” at the site and therefore it would “likely” be considered a new plant if constructed.

“Long-term either way, there will not be any new coal plants built in Kansas, and Holcomb 2 is dead, other than getting an official stamp on it"

- Bill Griffith, energy chair of the Kansas Sierra Club

Still, utility officials aren’t yet willing to concede that the proposed rule would close the door on the expansion project. Sunflower spokesperson Cindy Hertel declined to be interviewed, but said in an email that the company was still evaluating the new rule.

For now, Sunflower’s best hope might rest with Kansas Attorney General Derek Schmidt. He has joined his counterparts in 15 other states to ask the EPA to delay the new rules until the courts can review them.

“It appears from the EPA’s own summary that the Obama Administration has failed to accommodate the comments that were offered by my office, the Department of Health and Environment, the Kansas Corporation Commission, and nearly four-and-a-half million others regarding the EPA’s massive restructuring of state economies by regulating the generation and dispatch of energy to consumers and businesses.” Schmidt said.

Schmidt and his counterparts in other states recently prevailed in a separate case against EPA regulation of other types of power plant emissions, with the U.S. Supreme Court ruling 5-4 that energy cost must factor into any such rules the federal agency makes.

Schmidt and the other attorneys general argue that transforming the way energy is generated should be a matter for elected leaders, not federal bureaucrats. Environmental groups say they’re confident that the new Clean Power Plan will withstand any legal challenges. Either way, the prospects for Sunflower Electric’s Holcomb expansion appear dim. In the Clean Power Plan, the EPA addressed the possibility of the Holcomb plant and a couple of others actually being built and operated.

"It appears that the possibility of these plants actually being built and operating is too remote," EPA officials wrote. "The EIA (Energy Information Administration) projects that few new coal-fired EGUs (Electric Generating Units) will be constructed over the coming decade and that those that are built will apply CCS, reflecting the broad consensus of government, academic, and industry forecasters. The primary reasons for this projected trend include low electricity demand growth, highly competitive natural gas prices, and increases in the supply of renewable energy."