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New regulations could end dispute over Kansas coal-fired power plant

By Bryan Thompson | August 20, 2014

The Environmental Protection Agency recently proposed greenhouse gas regulations that could prevent construction of a 895-megawatt facility next to an existing coal-fired unit at Sunflower Electric Power Corp.’s generating station outside Holcomb

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The long-running legal battle over the construction of a coal-fired power plant in southwest Kansas continues.

Earlier this summer, the Sierra Club filed a lawsuit challenging the latest construction permit to be issued by state health officials. The environmental group says the permit, issued by Kansas Department of Health and Environment Secretary Dr. Robert Moser, doesn’t impose adequate limits on greenhouse gases and other pollutants. A KDHE spokesperson says otherwise.

Meanwhile, factors outside of the courtroom may have more bearing on whether the $2.8 billion plant, which has been on the drawing board for more than a dozen years, will ever be built.

Greenhouse gas regulations recently proposed by the federal Environmental Protection Agency could make it virtually impossible to build the 895-megawatt facility next to an existing coal-fired unit at Sunflower Electric Power Corp.’s generating station outside Holcomb. By one estimate, carbon emissions from the new unit would exceed the limits by about 50 percent.

“The project just doesn’t make sense,” said Amanda Goodin, a lawyer helping to lead the Sierra Club’s fight against the plant. “It doesn’t make sense from an energy needs standpoint. It certainly doesn’t make sense from an environmental or a health or clean air standpoint. So, it’s pretty hard for me to see how they could move ahead with this expensive project.”

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KPR story: New regulations could end dispute over Kansas coal-fired plant

Environmental activists like Goodin aren’t the only ones who are skeptical. Many utilities no longer see coal plants as a viable option.

“At this point, we do not have any plans in the future to build any more coal-fired generation,” said Katie McDonald, a spokesperson for Kansas City Power & Light.

Gina Penzig, a spokesperson for Westar Energy, says the state’s largest utility is keeping its options open while attempting to forecast how the new EPA regulations will “change the economics around all generation.” But, she says, “We also don’t have any current plans to build any new coal-fired generation.”

Both Westar and KP&L are focused on helping their customers use less power and relying on natural gas and wind to meet any new demand.

Still, Sunflower isn’t conceding defeat. Claire Gustin, Sunflower’s vice president of member services and external affairs, said the company remains committed to completing the project. Gustin thinks the EPA has signaled its intention to regulate the new unit as an existing – not new – plant.

“The EPA has already said, ‘You have been at this long enough, you have done so much engineering work on this project, you’re an existing unit,’” Gustin said.

The distinction is important because proposed rules for existing power plants don’t set emissions limits for each plant. Rather, they require the state to cut aggregate emissions by 23 percent from 2012 levels by 2030.

Environmental advocates say the state won’t able to meet even those limits while bringing a new coal-fired plant online without new “carbon capture and storage” technology, which isn’t yet commercially available.

These combustion units at the Holcomb plant are used to burn pulverized coal and generate energy.

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Even if it were, adding it to the Holcomb plant wouldn’t be cost-feasible, says Lee Boughey, a spokesman for Tri-State Generation and Transmission, the Colorado-based cooperative partnering with Sunflower on the project.

“Tri-State and Sunflower have already made a significant investment in the development of the Holcomb expansion project, and at this point the project would be very difficult to be modified to include carbon capture and storage technologies,” Boughey said.

Goodin, the Sierra Club’s lawyer, said how the companies might meet the regulations for existing plants isn’t likely to be an issue. The Clean Air Act, she said, requires that plants must be physically under construction to qualify as existing facilities.

“Unless Congress amends the law and changes that definition, they’ve got to go with what the law says,” Goodin said.

But if the EPA classifies the Holcomb plant as existing for regulatory purposes, additional cost might not be an insurmountable barrier to its construction. Compromise legislation passed in 2009 created incentives for utility companies to generate power from renewable resources in exchange for allowing Sunflower to move forward with the coal plant. The legislation also permitted large power cooperatives to opt out of state regulation of their rates. Sunflower exercised that option in September of 2009, meaning it doesn’t need Kansas Corporation Commission approval to build the plant unless 5 percent of its customers ask the KCC to intervene.

Former Rep. Josh Svaty, a Democrat from Ellsworth, was one of the few House members to vote against the 2009 compromise bill, signed into law by then-Democratic Gov. Mark Parkinson. In an explanation published in the Salina Journal, Svaty said the deregulation issue was the reason for his “no” vote.

“I truly believe that it is not good public policy to deregulate a company just as it is about to launch a multibillion-dollar capital project,” Svaty wrote. “We should be prepared for a series of unprecedented rate increases.”

Sunflower, a nonprofit company based in Hays, provides wholesale power for about 400,000 homes in southwest Kansas through six electric cooperatives. The company has said that almost 80 percent of the power that would be generated by the new Holcomb unit would be reserved for Tri-State, which supplies more than 40 electric cooperatives in Colorado, Nebraska, New Mexico and Wyoming.

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