Analysis: Blackout reminds Kansans of energy issues

? A month before Kansas voters named his successor, Gov. Bill Graves appointed a 13-member council to draft a state energy plan.

His announcement last October created little buzz outside the circle of regulators, activists and industry officials already watching energy issues closely.

Nor did energy issues seem important in last year’s gubernatorial contest between Democrat Kathleen Sebelius and Republican Tim Shallenburger. Both mentioned the need for an energy plan and touched on conservation issues, but only in passing.

Graves’ energy council kept working — quietly, largely out of public view — after Sebelius won the election. But even fears that natural gas prices would cause Kansans’ winter heating bills to skyrocket didn’t seem to rouse state government from its slumber on energy issues.

Then, on Aug. 14, the largest blackout in U.S. history cut power to parts of the Northeast, Midwest and Canada. About 50 million people in eight states were affected.

The blackout served as a reminder to Kansas policy-makers that energy issues are important and pointed out the need for a vigorous debate about how to ensure that homes, businesses and citizens would have reliable and affordable sources of energy in the decades ahead.

“If we need more of a wake-up call, I don’t know what it would be,” said Jim Zakoura, an Overland Park attorney who tracks energy issues and represents large industrial consumers in regulatory proceedings.

The council Graves appointed last year is supposed to make annual recommendations to legislators on energy policy; study the state’s consumption and production of energy; and draft an energy plan.

In recent years, energy problems have included a declining oil industry, spikes in natural gas prices and winter heating bills, gasoline prices edging close to $2 a gallon and an uncertain financial future for the state’s largest electric company, Westar Energy. Yet none have forced the drafting of an energy plan.

When Graves appointed the council last year, Chairman Lee Allison, state geologist and director of the Kansas Geological Survey, suggested the state faced a single overarching issue — keeping the production of energy ahead of the consumption, so that Kansas does not export its wealth to import energy.

Allison reiterated that point in January in a report for legislators, in which he noted that Kansas became a net importer of energy in 1997. Kansas imported $1.6 billion worth of energy in 2002, and that figure is expected to rise to $2.5 billion by 2007.

Some legislators have even worried about the state importing electricity, though Allison noted utilities have enough generating capacity to meet the state’s needs. A report this year from the Geological Survey said that in 1999, utilities generated more than 42 million megawatt hours of electricity, while Kansans consumed less than 34 million.

“Where the problem seems to be is in the transmission and hooking systems together,” Allison said.

In trying to pinpoint the cause of the recent multistate blackout, investigators have suggested that the shutdown of three transmission lines in northern Ohio may have led to outages on the nation’s Eastern power grid.

That grid covers most of the United States and Canada east of the Rockies, including Kansas but excluding Texas.

Doug Henry, Westar’s vice president of power delivery, said population densities might explain why cities in the Northeast were affected while Kansas was spared.

“Not only are they farther away from generating stations, but those load pockets are huge,” he said.

Yet the blackout naturally raised questions about the health of utilities’ generating stations and transmission lines.

Though there’s no indication of problems, for example, in Westar’s system, 19 of the 38 generating units at its 11 plants are more than 30 years old, and they account for about a third of the company’s capacity.

Furthermore, with the power grid’s development, one utility’s problems can become regional or even more widespread.

“It doesn’t take but one small utility hooked in somewhere for a problem to cascade down the line,” said David Springe, chief attorney for the Citizens’ Utility Ratepayers Board, which represents Kansas consumers. “Obviously, the system gets stressed because we keep increasing our usage.”

Springe argues the blackout and concerns about future generating capacity should raise issues about how state regulators oversee utilities. The current model emphasizes reimbursing companies for the cost of providing a monopoly service and providing a decent return for investors.

“They don’t get paid for helping people save energy,” he said. “They get paid for lines and plants.”

Springe acknowledged that in suggesting more focus on conservation efforts, he was voicing a left-of-center — even liberal — sentiment, one perhaps in conflict with calls for more energy production.

But a larger point is that policy makers in Kansas need to leave room for such debates high on their agendas.