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On October 18, 2007, Mountain Parks Electric’s wholesale power supplier, Tri-State Generation & Transmission Association, experienced a very significant setback in its future power supply plan. The Secretary of the Kansas Department of Health & Environment (KDHE) denied Sunflower Electric Power Corporation construction permit for two 700 megawatt (million-watt) coal-fired generation units near Holcombe, Kansas, at the site of an existing 360 megawatt plant. Tri-State G & T was one of the major partners in this project, which was scheduled for completion by 2013. The Secretary’s decision sets aside KDHE professional staff’s recommendation to issue the permit and disregards the extensive and exhaustive work completed by KDHE technical staff to ensure that public health and the environment are protected, public concerns were addressed, and strict state and federal laws were followed. Following an in-depth assessment of available technologies, Sunflower, operator of Holcomb Station, filed an air permit application with KDHE in February 2006. This application incorporated the best available control technologies (BACT) to ensure that the project would meet or exceed all state and federal regulations. Since then, the department thoroughly reviewed the project, held three public hearings, and responded to public comments as part of their preparation of the final permit. The Secretary’s decision was based on his opinion that additional carbon dioxide in the atmosphere presents a “substantial endangerment” to the public health of Kansans. Current EPA and Kansas regulations do not consider carbon dioxide a pollutant. On November 1st, Sunflower filed requests for hearings, as the first step of a legal challenge which will begin in District Court, and eventually, the Kansas Supreme Court. “The project complies with all the state and federal environmental laws and regulations. Sunflower’s president and chief executive officer, said in a written statement, “In our view, it is unfair to attempt to change these rules in the middle of the game.” Utility regulators in Florida and Oklahoma rejected coal-fired plants earlier this year. Environment groups have said the Kansas decision represented the first time a government agency denied an air-quality permit specifically because of carbon dioxide emissions. Environmentalists attacked the plants because they would produce an estimated 10 million tons of CO2 per year. But Sunflower said the bioenergy center and other measures could reduce those amounts to as low as 4.5 million tons. “Unfortunately, this decision opens the door to higher rates for our cooperative customers. We reject the Sierra Club’s recent assertion that doubling electric rates would be acceptable. Our farmers, small business owners, senior citizens and commercial customers should not be burdened by higher rates because of political maneuvering,” said Earl Watkins, Sunflower’s CEO. This action also impedes Sunflower’s ability to invest in and advance the algae technology that would utilize carbon dioxide from the power plants. To address carbon emissions, the project partners had completed initial testing for an innovative algae reactor that would utilize a portion of the carbon dioxide emissions from Holcomb Station to produce biofuels, including ethanol and biodiesel. Funds that would have been earned from the power plant expansion project were expected to be used to finance Sunflower’s investment in the commercial algae reactor. Meanwhile, in Wyoming, Basin Electric Power Cooperative (another MPEI supplier) received an environmental challenge to its 365 MW Dry Fork Station, near Gillette, where work on the $1.34 billion plant began October 17, 2007. The permit appeal, filed November 1st by the Wyoming Environmental Quality Council, is seen as the latest in the string of legal actions by environmental groups seeking to slow or stop new coal plant construction nationwide. Coal plants generate more than 50% of the U.S. electric supply, and for the electric cooperatives, coal represents 80% of capacity. Tri-State G & T had signed on for 75% (289 MW) of the Wyoming plant. On October 16, 2007, the National Electric Reliability Council (NERC) issued its report on the U.S electric supply, with the following ominous forecasts: According to Tri-State G & T, the Holcomb Station expansion was designed to serve the growing energy needs of Tri-State’s electric consumers with reliable, low-cost power using advanced generation and environment control technologies. Tri-State G & T will look at all its options to ensure it can secure a reliably supply of low-cost power, on-time, to meet its member-systems’ requirements; modern, clean-operating, coal-based power plants can and should be part of our balanced resource planning approach. The G & T’s participating in the Holcomb expansion continue to receive broad support in Kansas from citizens, local governments, legislative leaders, school districts and business and labor leaders, who understand that the electric cooperatives are working to provide economical and reliable energy resources, while also protecting the environment. Tri-State G & T continues to seek other technologies and renewable resources to meet the demands of its customers. Included in resources currently being considered are: All of these alternatives, as well as a new coal based generating station in South East Colorado, are being evaluated. The reality, not only for MPEI members, but also for electric customers nationwide, is that electric capacity will be in short supply, and prices will continue to increase. The delays, legal costs, and escalation in prices for materials and labor will only make the situation worse. Tri-State G & T’s primarily coal based generation will cost MPEI $66/MWH in 2008; wind generation currently costs $110/MWH, and solar is projected to cost $150-$200/MWH—so there is no ready and economical alternative. The Sierra Club has stated its objective is to double the price of electricity, so as to make renewable resources look more competitive. Media and political attention to the perceived “global warming” is the subject of great debate and scientific analysis—yet China, India, and other emerging economies are building two power plants per month, without the benefit of advanced air pollution control technologies which are required by U.S. regulations. Our days of inexpensive and abundant electric supply are headed in the same direction as oil, natural gas, gasoline, and all forms of energy.
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