Kansas utilities predict new EPA rules will lead to blackoutsBy KAREN DILLON and STEVE EVERLY
The Kansas City Star
Here are two versions of what it will be like to live in Kansas in 2012:
Either residents will suffer rolling blackouts and pay more for the privilege, or nothing will happen at all.
Backing the energy disaster scenario are utilities and the state itself. The other side is the U.S. Environmental Protection Agency and environmental groups.
The dispute will play out in a federal appeals court in Washington, D.C.
At the heart of the argument is the so-called cross-state transport rule, which seeks to prevent pollution from coal-fired power plants from blowing to other states by requiring utilities to reduce emissions.
Kansas utilities say that the rules have come so quickly and are so stringent that they wont be able to comply in time. As a result, thousands of Kansans will experience rolling blackouts or brownouts, which will also cost jobs when the plants shut down. In addition, customers will face higher utility bills to pay for more than $100 million in new pollution control expenses and other costs.
The adverse effects from such reductions caused by the 2012 emission limits are dire, concrete, substantial and imminent, attorneys for Kansas utilities told a federal appeals court.
EPA says thats nonsense. The costs will be far less between $5 million and $30 million and Kansas utilities will have more than a year to implement the emission controls.
Kansas has failed to show that the lights will go out in Kansas, attorneys for the EPA wrote.
In fact, the EPA says the benefits of the transport rule prevention of 83 to 210 deaths annually in Kansas and a savings of $700 million to $1.7 billion annually in health care far outweigh the utilities costs.
For decades, utilities had been to slow to curtail the release of millions of tons of dangerous emissions annually. But in recent years those utilities, prodded by the EPA and aware that stringent regulations were in the offing, have been installing pollution controls.
EPA announced the transport rule on July 6. It orders 21 states from Kansas east to the Atlantic to decrease by 70 percent sulfur dioxide emissions and by 50 percent nitrogen oxides from the burning of coal in power plants.
The new emission reductions for Kansas would reduce pollution not only in Kansas but also states that are downwind, including Illinois, Iowa, Missouri, Nebraska, Oklahoma, South Dakota and Wisconsin. Reducing pollution would benefit millions of people in those states, the EPA said.
Missouri utilities, which had been under an earlier order than Kansas, generally have already complied.
But Kansas utilities Westar, Kansas City Power & Light, Sunflower Electric Power Corp. and the Kansas City, Kan., Board of Public Utilities said they were caught off guard by the July announcement and dont have enough time to prepare because the necessary retrofits will take years to complete.
We could have rolling blackouts next summer, David Mehlhaff, a spokesman for BPU, told The Star.
Westar Energy officials said they are worried about power outages as well. Kansas City Power & Light said its La Cygne, Kan., power plant, which is co-owned with Westar, had already started retrofits that will comply with the new regulations, but they werent scheduled to be completed until 2015. Any power disruptions, however, could be offset with electricity from KCP&Ls Missouri facilities, which are not included in the appeal.
The utilities and the Kansas attorney general joined a handful of states and several dozen utilities in filing lawsuits in the U.S. District Court of Appeals in Washington, D.C., asking for a stay and further review of the rule.
The disagreement between Kansas, the utilities and EPA is so contentious that the two sides cant even agree when the new rules were known and when they go into effect.
They say the EPA is only giving them until January to comply.
No one expected that, said Greg Greenwood, senior vice president of strategy for Westar.
They said the new rules would force them to shut down coal plants in midsummer.
Unfortunately the new requirements will substantially cost our members and those they serve, said Cindy Hertel, a Sunflower spokeswoman. Sunflower estimates that installing upgraded emission technology will now cost our members nearly $21 million, and we expect to face additional costs to meet the requirements.
To meet the new regulations, utilities will need to use an array of electric generators, not only coal but also gas and wind, to keep emissions down, but they say they havent had time to plan. They also may have to trade or buy emission allowances with other states and purchase electricity from other companies to reduce the use of coal.
The utilities have the option of purchasing the allowances from other utilities that can meet the standards so they wont have to stop production. But they say there wont be enough allowances to go around, which will raise their costs. Kansas utilities could end up paying more than $100 million.
You dont know what the price is going to, said Greenwood of Westar. There are not enough allowances.
Again, EPA disagrees on a number of fronts.
For one, Kansas will have had more than six years to address significant pollution problems, EPA attorneys said in the court case.
And, EPA said, utilities have until March 2013 to demonstrate they hold sufficient allowances to cover their 2012 emissions. In addition, EPA said Kansas utilities had been put on notice in 2006 that they had to reduce emissions.
The federal government said many Kansas utilities already are cleaning up their coal plants. Some are under consent decrees that already require emission reductions, and others have installed control technology that would reduce emissions to below 2010 levels.
EPA calculated that the cost of the rules to Kansas utilities would be $5 million.
Such costs are hardly prohibitive and do not have to be incurred as urgently as Kansas asserts, EPA attorneys said.
Although federal officials would not comment for this article, a Sierra Club director said the utilities complain every time theyre faced with new rules.
Its the same Chicken Little, the sky is falling, said Bruce Nilles, Sierra Clubs deputy conservation director.
Of course American ingenuity and reasonable people prevail. And it all gets done and is cleaner and cheaper than anyone ever expected.