Archive for Sunday, May 6, 2001

Tax break aims for new utility plants in state

May 6, 2001


— Kansas could be in the running for a power plant construction boon, a key lawmaker said Saturday after the House approved a package of utility bills.

The measures, which now go to Gov. Bill Graves for consideration, would give utility companies extensive tax breaks to build new electric plants in Kansas.

Supporters of the bills said they were needed for two reasons: to ensure Kansas has a reliable source of electrical power and to boost the economy through the construction of power plants.

"The issue is whether you want to have your lights on," said Rep. Tom Sloan, R-Lawrence, a proponent of the legislation.

But opponents said they didn't like the tax breaks. Under the bills, unregulated, or so-called independent, power plants would not have to pay property taxes during construction and the first 12 years of operation.

Regulated power plants would receive 10-year tax exemptions for new plants and transmission lines. The bills also authorize a state agency to issue bonds for pollution control devices.

Rep. Doug Spangler, D-Kansas City, said the state shouldn't be giving tax breaks "to everyone ... who can hire a lobbyist to come to Topeka."

But Rep. Carl Holmes, R-Liberal, and chairman of the House Utilities Committee, said all the major power companies said they needed these tax breaks to build in Kansas because they are being offered better breaks in neighboring states.

"They're waiting on this bill. If this bill goes down, they're not going to build in Kansas," Holmes said.

Both measures were overwhelmingly endorsed by the House.

Later, Holmes said, companies such as Western Resources, Kansas City Power & Light, Utilicorp United Inc., and other affiliates and subsidiaries have talked about building plants in Kansas.

Also, he said, he has heard from Duke Energy, which has been considering building a $200 million, 640-megawatt plant in northeast Kansas.

Holmes said the last power plant built in Kansas was the Wolf Creek nuclear plant in 1985 and that the state was in dire need of expanded generating capacity.

Holmes said that under a worst-case scenario, Kansas will outstrip its current capacity and suffer rolling blackouts in 2003.

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