Archive for Thursday, May 6, 2004

State courts energy project

Bond use OK’d in bid for $1B power plant

May 6, 2004


— Kansas signaled Wednesday it was jumping into the competition for a $1 billion experimental power plant.

The U.S. Department of Energy and a consortium of private energy companies have joined efforts to develop the FutureGen project -- a nearly emission-free, coal-fired electric generation facility.

In a bill rushed through the House and Senate, the Legislature gave the Kansas Development Finance Authority the approval to issue revenue bonds for the project if Kansas was selected as the site for it. The bonds could help finance the $200 million private share of the project, lawmakers said.

The measure now goes to Gov. Kathleen Sebelius for consideration.

"I truly believe this has some wonderful potential," said Sen. Stan Clark, R-Oakley, chairman of the Senate Utilities Committee.

Rep. Tom Sloan, R-Lawrence, who sponsored the legislation, said the ability to offer bond financing would enhance Kansas' position in the competition.

"The reason for the bill is to differentiate Kansas from the other states that are bidding," Sloan said.

More than a dozen states have announced intentions to bid on the facility, including Texas, which has proposed spending $10 million in tax revenue for the project.

But officials said Kansas had several advantages, including a central location, proximity to national rail lines to transport coal from other areas of the country and the potential to pump carbon dioxide into eastern Kansas coal fields instead of releasing it into the atmosphere.

A committee has been appointed to develop Kansas' bid for the FutureGen plant, which is expected to become a worldwide center for experimental energy production.

The committee is headed by Lee Allison, director of the Kansas Geological Survey, and includes Sloan.

Sloan and Clark said Kansas higher education institutions would work on the proposal.

"Regents institutions should be actively involved in this," Sloan said.

More than 30 representatives of utilities, higher education and government recently met at Kansas University and unanimously agreed that the state should compete for the project.

Officials are scheduled to identify possible FutureGen sites by October with a final site selected in 2006.

Sloan said the bill was devised in the final days of the session because Allison had recommended, after visiting with energy department officials, that Kansas could improve its bid with the bonding authority.

Sloan and Senate President Dave Kerr, R-Hutchinson, said if revenue bonds were issued by KDFA under the bill, the bonds would be repaid by the private investors making up the consortium.

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