Holcomb plant expansion to move forward – agreement balances energy, economy, and environment

A new face in Kansas politics is bringing bipartisan solutions to difficult problems. Rather than simply falling back on strict anti-coal ideologies, Kansas’ new governor, Mark Parkinson, has worked with energy producers to end a protracted legal dispute over the state’s energy future.

The dispute began in 2007 when the Secretary of the Kansas Department of Health and Environment (KDHE), Roderick Bremby, ruled that a planned expansion of the Sunflower Energy Holcomb generation station could not proceed. Despite the fact that the planned expansion “complied with all federal and state environmental laws and regulations”, Bremby arbitrarily refused to grant the project’s state air quality permit citing his personal concerns over potential future impacts of CO2 emissions from the plant. Project proponents argued that Bremby and the KDHE were playing capricious political games as they attempted to change the rules in the middle of the permitting process.

Subsequent to Bremby’s ruling, the Kansas legislature passed four separate bills – all aimed at allowing the project to continue. Each was vetoed by then-Governor Kathleen Sebelius (now U.S. secretary of health and human services). Legal challenges to the Sebelius/Bremby/KDHE decisions mounted and both sides became more and more entrenched.

With the move of Sebelius to Washington to serve in the Obama administration, a new governor took over the office in late April. On May 4th, Governor Parkinson announced that his office had reached a compromise that would allow the construction of one 895MW coal-fueled plant (the original proposal had been for two, 700MW plants).

This agreement appears to be a reasonable recognition for the need to develop more baseload generation capacity, as well as a strong push for energy efficiency. Additionally, the compromise will aid the state economy by moving forward on the multi-million dollar development and creating more than 1,500 jobs during the 46 month construction cycle. A further 50 permanent full-time jobs will be required to maintain the plant after construction ends.

Various sources reported that, as part of the agreement, the Kansas legislature would need to approve Parkinson-backed proposals to implement statewide net metering, a 20% renewable portfolio standard (percentages to be met by 2016), allow out-of-state electric cooperatives to take part in the project as a means of bolstering economic viability and reducing rate increases, and to encourage the use of solar- and wind-powered generators by consumers.

Another aspect of the agreement restricted the KDHE’s power to regulate greenhouse gases (GHG). The secretary of KDHE would no longer be allowed to unilaterally implement emissions standards that exceeded federal requirements without the approval of the State Legislature. With many state legislators openly supporting the agreement, it moved very quickly through the approval process and both the House and Senate overwhlemingly approved the bill on May 8th.

For its part, Sunflower Energy is reported to have agreed to,

  • Install an ultra-supercritical boiler in the new plant
  • Permanently decommission two oil-fired power stations in Garden City, KS
  • Install updated pollution controls that will, among other reductions, ensure mercury emissions from the existing and new coal-fueled plants do not exceed the total Hg emissions from the existing plant
  • Build wind farms in Kansas equivalent to 20% of the net capacity of Holcomb 2 (~160 – 179MW)
  • Use biomass to supply 10% of the heat input into the existing Holcomb boilers
  • Spend 1% of gross revenues on energy efficiency programs
  • Build two transmission lines of at least 345Kv to Colorado (allowing the movement of electricity west, as well as helping to mitigate against the often unpredictable spikes and lulls in production associated with wind-based energy)
  • Build an experimental algae reactor that uses CO2 to grow algae and then produces energy from the digestion of that algae biomass, and
  • Pursue other CO2 offset options that will amount to 3.016 million tons (45%) of the CO2 emissions from the plant

Environmental NGOs immediately set about to diminish the importance of this agreement, melodramatically claiming Kansas had “given up its place as a national leader on clean energy.” The Kansas chapter of the Sierra Club actually even complained that the agreement was a “significant setback” and that the “ ‘carbon offsets’ cited in the agreement are generally questionable, unenforceable, and won’t result in a reduction in global warming pollution.” Hardly a ringing endorsement of the coming cap & trade legislation from a group that has worked ceaselessly to see carbon offsets mandated across the country.

Despite the input from the naysayers and anti-coal factions, with this agreement, Kansas can move beyond the roadblocks and get to work building for the future. Kansans will continue to enjoy the reliability and affordability of our nation’s most abundant energy resource for their energy needs.

This agreement also balances the need to expand our nation’s baseload generation capacity and helps to supply energy users with abundant and affordable domestically-sourced energy. At the same time, it ensures that energy efficiency and environmental integrity are maintained to the highest possible standards.

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Jason Hayes, M.E.Des. is communications director for the American Coal Council

 

19. May 2009 by Jason Hayes
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