Kan. Senate rejects emissions limit 

Senators overwhelmingly rejected a proposal Wednesday to impose the state’s first limits on carbon dioxide emissions, then gave first-round approval to a bill allowing two coal-fired power plants in southwest Kansas.

The Senate advanced the bill on a voice vote, setting up final action Thursday, when approval would send the measure to the House.

But the vote was 32-3 against the CO2 rules proposed by Sen. Chris Steineger, a Kansas City Democrat. His proposal included not only emissions limits for new power plants but a carbon tax of $3 on each ton of excess emissions for utilities that failed to comply.

Many critics argued that the CO2 rules would hurt the economy and encourage businesses to leave Kansas.

‘What it would do is bring economic development to an absolute, screeching halt,’ said Sen. Susan Wagle, a Wichita Republican.

Steineger said the rules would encourage utilities to operate coal-fired plants more efficiently and spur the development of new technologies.

‘I accept the fact that coal is going to be burned by the human race for a long time,’ Steineger said. ‘I think it’s incumbent upon us to find a way to burn coal more cleanly and more efficiently.’

The House is working on its own energy bill. Its measure would permit the two coal-fired power plants but require utilities to generate 10 percent of their electricity with renewable resources, such as wind, by 2010 and 25 percent by 2025.

Both bills are responses to a decision in October by the state’s secretary of health and environment to deny an air-quality permit to Sunflower Electric Power Corp. The Hays-based utility wants to build the coal-fired plants outside Holcomb, in Finney County.

In denying the permit, Secretary Rod Bremby cited the plants’ potential CO2 emissions, an estimated 11 million tons a year. But Sunflower’s $3.6 billion project has bipartisan support among legislators.

Provisions in the bill would limit the secretary’s power to reject air-quality permits for such projects. It also would prevent the secretary from imposing some emissions rules without legislative approval.

Supporters of the project view it as an economic development opportunity that the state shouldn’t miss. But they also believe that the state eventually will need the power the new plants would provide.

‘We’ve heard a lot over the months about the economic development,’ Senate President Steve Morris, a Hugoton Republican, told his colleagues. ‘That’s certainly a very important, critical part of this. The even more important reason for this bill and this debate is for our energy security.’

As originally drafted, the bill included proposed limits on CO2 emissions from new power plants, but the Senate Utilities Committee stripped them out.

Steineger wanted to reinsert the CO2 rules. Initially, the limits for a new coal-fired plant would have been lower than the existing emissions per kilowatt hour of electricity for any existing plant. After a plant has been in operation for a year, emissions would have to be 20 percent less.

Utilities could have ‘offset’ – lowered their emissions on paper – by investing in carbon-capture technology or wind farms, expanding transmission lines or undertaking conservation or beautification programs. Utilities that didn’t comply would face the carbon tax.

Environmentalists, some legislators and Gov. Kathleen Sebelius viewed those proposed rules as far too weak.

They have argued that no utility would have trouble meeting them and that utilities with coal-fired plants blocked in other states would be encouraged to build them in Kansas. Also, they said the carbon tax would be too low, given that carbon credits trade in Europe for as much as $30 a ton.

But some conservative legislators and anti-tax groups objected to any plan to regulate CO2. They said it could lead to more onerous regulations in the future and that any such regulations should be attempted – if at all – only by the federal government.

‘On the left side, we were told $3 was an insult because it wasn’t enough,’ said Sen. Janis Lee, of Kensington, the Utilities Committee’s top Democrat. ‘On the right side, we were told $3 was an insult because it was a carbon tax.’

Bremby has told legislators that he wants to move ahead with creating a program in which utilities and companies in other industries voluntarily limit their CO2 emissions. But he said no business has expressed an interest.

Associated Press

AFX News Limited

forbes.com

14 February 2008