Proposed cap-and-trade legislation would mean bigger rate hikes for northern Kansas Westar customers / LJWorld.com

Archive for Monday, July 6, 2009

Associated Press

July 6, 2009

Wichita — Unless changes are made, a proposed cap-and-trade system would mean coal-dependent northern Kansas utility customers, like those in Lawrence, would face higher rate increases than their nuclear-power using neighbors to the south.

The systems proposed in Congress would force utilities to reduce their emissions or pay extra for pollution credits.

For years, southern Kansas customers paid more for electricity because of the expense of building Wolf Creek nuclear plant at Burlington, the baseload power plant for Westar South. But the gap has closed as the debt for the nuclear plant was paid down and restructured and the cost of coal rose.

Currently, customers of Topeka-based Westar Energy Inc., the state's largest electric utility, pay nearly identical rates.

Westar wants to equalize the rates before they diverge again; the Kansas Corporation Commission will consider the issue.

Analysts say that if the rates aren't equalized, Westar Energy customers in the northern part of the state would face rate increases that are twice as high as their southern cousins.

But that has generated frustration among some southern customers, including the Wichita school district, which has intervened in the case. The district argues that rate parity now would be unfair to Westar South customers.

"South rate area customers are just beginning to realize the benefits of paying for one half of the investment costs in Wolf Creek," according to an analysis by James Daniel of GDS Associates, who testified for the district. "The north rate area customers would begin to receive the Wolf Creek low fuel cost benefits, yet they have not paid one dollar towards the high investment costs."

The different rates have their roots in the 1992 merger of Kansas Power & Light with Kansas Gas & Electric to form the company now known as Westar. The rates for Westar's Northern and Southern divisions are divided along the old KPL and KGE boundaries.

Westar and the commission staff argue that they have worked hard to reduce southern bills over the years and that Westar is one company operationally.

"They are dispatched as one system of generators, decisions about transmission treat the two areas as one system, and capacity expansion planning treats both service areas as one service area," said Robert Glass, chief of economic policy and planning for the commission. "This has been true since the merger of KPL and KG&E became effective."

The main reason that northern customers would pay more is because the Jeffrey Energy Center near St. Marys, Westar North's main plant, emits about 16 million tons of carbon dioxide a year, while Wolf Creek emits none.

Analysts for the Citizens' Utility Ratepayer Board and Kansas Industrial Consumers estimated that about two-thirds of the cost of cap-and-trade would fall on Westar North.

Normally, the two consumer groups are allies, but in this case, CURB favors rate consolidation and the industrial group opposes it.

Former Wichita Mayor Bob Knight, who crusaded for rate parity in the early 2000s, said it's amusing to hear the same arguments he made then now being used by Westar and the commission staff, which rejected them in the past.

"And the world turns," he said, chuckling. "Now it's kind of a novel concept, this idea that the energy doesn't know where it's coming from or where it's going."

Discussion

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6 July 2009
at 8:18 a.m.

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kansasmutt (Anonymous) says…

Have we not had an 11% rate jump and also a 14% jump in the last 1.5 years in this area ? Seems like the KCC is not keeping an eye on us and KPL is gigging us for all they can. Time to put a wind turbin on every home and let KPL shut down. Wages are going down in KS but KPL is sucking us dry. Living in Kansas is starting to really suck.
6 July 2009
at 8:29 a.m.

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TomShewmon (Tom Shewmon) says…

Funny that the extremist environmentalists are down on nuclear, one of the most, if not the most clean and efficient forms of energy production. Maybe it just makes too much sense for the kooky contingent to get their heads around and/or implies more big corporate which this crowd breaks out in hives over at the mere thought.
6 July 2009
at 8:43 a.m.

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overthemoon (Anonymous) says…

It would be a good thing to see Weststar take an open book cut in profits before raising rates again.

It would also be good to see them actively pursuing an economical way to put solar panels on houses that have the exposure to use it effectively. They do it Europe, why not here?? Even if the energy produced amounts to only 25-30% of usage, the reduction in the need for coal burning plants to be belching away at peak hours would be significant. Friend of mine has had solar on their house for three years, 33% reduction in electric bills.

Yeah sure, Nuclear is clean on one side of the picture. But it takes many years to get a new plant on line, and there still doesn't seem to be an effective way to dispose of the spent uranium. It is also questionable as to how centralized our energy industry complexes should be. One natural or man made disaster and there's a huge problem.
6 July 2009
at 8:47 a.m.

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cg22165 (Anonymous) says…

Nancy,
You're painting with a pretty broad brush there. You and I have disagreed on many things regarding the environment, but I, for one, see nuclear as a viable alternative to coal, at least for the near future.
6 July 2009
at 9:06 a.m.

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TrekkerKen (Anonymous) says…

Thank you Mr. President and Nancy Pelosi. The Pelosi Tax, if it passes in the Senate, would be Obama's first visible Tax Increase…though he said he wouldn't raise taxes on us. Oh…I know..it's not a tax…..he's going to raise our energy expenses..sounds kinda like a tax to me.

Thanks to the environmentalists who don't like nuclear energy. Strange that Obama says it's ok for other countries to explore and use Nuclear Power Plants but we can't do it at home…hmm. I smell more pork.
6 July 2009
at 9:10 a.m.

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NoSpin (Anonymous) says…

Luckily it will only affect those who make over $250,000. Ha!
6 July 2009
at 9:11 a.m.

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lucky_guy (Anonymous) says…

I was amused to read that cap and trade might cost us more because of coal fired power plants. Oh wait, aren't we building another one out west? I seem to remember hearing that none of the Repubs in the kansas legislature cared about what Washington did with CO2. So here we are. Get out the checkbook cuz the Reps in KS don't care in the least and said so.

6 July 2009
at 9:12 a.m.

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average (Anonymous) says…

Nancy_boy

I agree with cg above. I'm generally pretty green/lefty. I'm also think nuclear is better than many other alternatives, and it's depressing that we've been twiddling our thumbs on cleaning up the fuel cycle, refining better plant designs, etc, for nearly 30 years. If cap and trade means that Wolf Creek 2 gets built, good. (Not that I'm opposed to nuclear closer to home… but it would be much easier at an existing site.) Yes, I realize that won't translate into 5c/kWh power.

That said, it is more than a little disconcerting to have nuclear safety in the hands of the Enron-graduate profit-uber-alles cowboy-culture common in today's deregulated energy grid.
6 July 2009
at 9:19 a.m.

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TomShewmon (Tom Shewmon) says…

As stated above, and something that anyone with a pulse knows, this so-called cap & trade bill is just a tax & regulate bill. The regulation part alone will rake in billions if not trillions over the years. This is a gift from god for liberal Democrats. Thanks Al Gore.
6 July 2009
at 10:27 a.m.

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RETICENT_IRREVERENT (Anonymous) says…

This is good news for dairy farmers.
After the food costs rise to the point where people can't afford food, the Government will start giving out Pasteurized Process American Cheese For Use In Domestic Programs.
that milk has to come from somewhere.

Government cheese, hope everyone likes sun grilled cheese sandwiches.
6 July 2009
at 10:39 a.m.

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BigPrune (Anonymous) says…

What needs to happen in Lawrence to make it more utopian:

1) Build a nuclear power plant to replace the coal power plant.

2) Build a maximum security prison to house the Gitmo detainees (for all the human rights activists that live here, so they know the terrorists are safe).
6 July 2009
at 10:39 a.m.

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Skeptical (Anonymous) says…

Nuclear is the about the only answer. What if our nuclear industry hadn't been politically shut down 30 years ago?

I've researched wind power a lot (look up “A Problem with Wind Power”) and it appears to be pratically useless. To replace Lawrence's power plant would take several thousand wind turbines along with some kind of non-existant electrical storage facility. There is currently no viable way to store electrical power on an industrial scale.

Luckily the free market quickly made BioFuel on a large scale seem unresonable. Hopefully folks will honestly look at the math associated with wind and solar.
6 July 2009
at 11:02 a.m.

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mary_jane (Anonymous) says…

The intention of the Cap and Trade bill is to reduce CO2 in the atmosphere. If you haven't noticed, the icebergs are melting. The ill effects of climate change are for real and they are happening now and with more and more severity. Hide your head in the sand all you want but this is reality. We can continue on our way and not give a crap or we can do something. Maybe instead of blaming a democrat for his effort to cut greenhouse gas emissions you can can take responsibility for your part and switch out your lightbulbs for ones that are more energy efficient. There are tons of ways to make your home less dependent on coal and many are even tax deductable. (That means you're paying less taxes). Cool.

As for nuclear power, that is so 1980's. Why in the world would you go with obsolete technology and chose to create all that waste when there is new clean energy like solar, wind, biomass, hydrogen, geothermal…? Duh!

This is not hard, people. We could have made these life altering changes a long time ago. You can thank guys like Earl Watkins, Sunflower Electric CEO, for continuing the nasty tradition of buying votes to keep dirty energy from other guys like Republican senator Sam Brownback.
6 July 2009
at 11:02 a.m.

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TomShewmon (Tom Shewmon) says…

The garden variety ideological ecological do-gooder with roots all the way back to the late 60's has been talking about photovoltaic cells, molten salts, wind farms and tidal power etc etc for what, almost 40 years now? Where are they with that today July 6 2009? I know, don't tell me, blame it all on the powerful right-wing corporate lobby, right?
6 July 2009
at 11:07 a.m.

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mary_jane (Anonymous) says…

“The garden variety ideological ecological do-gooder with roots all the way back to the late 60's has been talking about photovoltaic cells, molten salts, wind farms and tidal power etc etc for what, almost 40 years now? Where are they with that today July 6 2009? I know, don't tell me, blame it all on the powerful right-wing corporate lobby, right?”

Yes!! You're finally getting it. Good job.

6 July 2009
at 11:12 a.m.

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nickbundywestar (Anonymous) says…

We would love to pursue building Wolf Creek 2. The problem with this is the cost. We know it would be at least several billion dollars, but no one knows exactly what it would cost because there hasn't been one built in over 30 years. Rather than bet on a nuke that would potentially double rates, we've chosen to invest in wind, natural gas, energy efficiency and pollution controls at our existing plants.

Link to when public hearings are being held. http://www.westarenergy.com/corp_com/…
6 July 2009
at 11:26 a.m.

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jackbinkelman (Anonymous) says…

skeptical; Wind power technology isn't limited to windmills. I've read of an invention that is essentially helium balloon tethered to the ground with a self lifting design to keep it afloat for much longer than the helium lasts. It can be used anywhere on the planet for near constant wind energy. http://www.magenn.com/
http://www.youtube.com/watch?v=m6vgWP…

Obviously this system would have pros and cons. The point is, technology is evolving.
6 July 2009
at 1:06 p.m.

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Thats_messed_up (Anonymous) says…

you Lawrence Hippies are about to get what you voted for: Cap and Trade(Tax and Tax) and Socialized Health Care. America will go exactly the same way as California-bankrupt! You people think any company with a chance to move their operation out of the U.S. to avoid crap and trade will keep their factories here???? HAH!
The best part is you loser bloggers will be paying 5 times more for the electricity to post on here. lololol America will be taxing ourselves to death just to turn our lights on while China builds a new Coal plant every week. Speaking of “global warming” how bout those 70 degree temps the last couple days?
6 July 2009
at 2:09 p.m.

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mary_jane (Anonymous) says…

The Congressional Budget Office estimates the average family will pay an additional $175 per year under the new CAP and Trade policy. Since Kansans are more reliant on energy from burning coal our share will be more, maybe more like $200 per year. That's $17 per month. I can easily save that much by turning off the ac and opening up the windows. I could not buy cheap plastic crap from Walmart. I could grow my own tomatoes in the summer. This is all stuff that my depression era grandparents did their whole lives. I would hardly call them hippies. They were patriots who sacrificed to make our country a better place. What's wrong with making some sacrifices? Do you really prefer to breathe polluted air?
6 July 2009
at 2:30 p.m.

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logicsound09 (Anonymous) says…

“Funny that the extremist environmentalists are down on nuclear, one of the most, if not the most clean and efficient forms of energy production.”

––––––

Two points:

1) I agree that nuclear is an acceptable alternative to coal for the time being. We need to curb the extraordinary rate at which we are pumping CO2 into the air.

2) Nuclear is only clean if you don't count the inevitable nuclear waste that results from smashing those atoms together. Again, I am okay with nuclear as a short-term stopgap, but let's not delude ourselves into thinking that there are no downsides to that form of power.
6 July 2009
at 2:37 p.m.

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TomShewmon (Tom Shewmon) says…

Cap and trade is nothing more than Obama, Pelosi and Reid to dig deeper into our pockets–period. The miniscule effects that it may have on the globe, especially considering our heavily polluting nations around the globe is a complete joke. If you want to tax us ObamaCo, just do it fair and square. It's likely you're not going to be re-elected anyway–-none of you.
6 July 2009
at 3:30 p.m.

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edjayhawk (Anonymous) says…

Does anyone at all remember 3 Mile Island?
6 July 2009
at 4:20 p.m.

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hipper_than_hip (Anonymous) says…

A 1200MW nuc at Wolf Creek would enable us to close both the power plant at Lawrence, and the power plant at Tecumseh. A $10B project over 10 years employing over 10,000 high payed Union workers - sounds like a win win for KS.

6 July 2009
at 4:34 p.m.

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Ogallala_Kid (Anonymous) says…

Maybe after a few more years of rate hikes in Lawrence, people in Lawrence will start to understand what Western Kansas already pays for electricity.

Of course we obtain our juice from electrical cooperatives, and that is socialism I hear. We don't have any of those fancy multi-million dollar crook executives like you do either.
6 July 2009
at 4:39 p.m.

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logicsound09 (Anonymous) says…

You irrational hatred of Eastern Kansas is showing kid.
6 July 2009
at 4:44 p.m.

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belexus73 (Anonymous) says…

I am going to keep my points on nuclear to just Kansas. My thoughts on energy efficiency can be applied anywhere. The problem with another nuclear power plant is that Kansas will not need the generation. Our power demand is falling-granted some of it is the recession. But the state of Kansas is going to funnel 36 million dollars in the next 18 months thru Westar and othe utilities on energy efficiency which will drop demand quite abit. Also, with the demise of incadescent bulbs by 2013 there will be another drop of a few points. With these events happening try to get a nuclear power plant and the massive rate increase pass CURB and the KCC. Also, Westar has come out publicly against investing in another nuclear power plant. KCPL would be an easier fit under current management but again they would have to go through CURB and the KCC-let alone the Sierra Club. Where the rubber is going to hit the road is when a RPS is implemented against the backdrop of falling demand…..what power supply is going to get dropped? That is what is going to be interesting-because someone is going to lose money there, either the utilities or the consumers if the KCC gives them some kind of relief. So it is a nice intellectual argument to discuss nuclear power in Kansas but it is like discussing whether unicorns come in pastels or earthtones. If nuclear power makes a renaissance it will be predominantly in the southeast United States.
6 July 2009
at 4:48 p.m.

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logicsound09 (Anonymous) says…

“Cap and trade is nothing more than Obama, Pelosi and Reid to dig deeper into our pockets–period. The miniscule effects that it may have on the globe, especially considering our heavily polluting nations around the globe is a complete joke.”

––––––

I agree with you that the current cap/trade legislation is a pathetic drop in the bucket compared to the action that is necessary.

However, I think the problem isn't some money grab, as you have suggested, but more that Obama seems afraid to step on any political toes in the arena of domestic affairs.

Of course half of that problem is the Democrats in Congress, with whom I am not terribly impressed.
6 July 2009
at 5:48 p.m.

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madman (Anonymous) says…

I think Kansans will be well over $175 a year for the average. I heard in some areas as much as $4000. But, what I think isn't cool about this, is the paragraph in the legislation about homes that are on the market. Apparently they have to go through a federal inspection that would cause them to upgrade appliances to a level of efficiency. This could be 10 of thousand dollars that people have to put into their home before they can even sell it. Although I think we all need to be doing these types upgrades to homes , this could be a tremendous hardship for a person trying to get out from under a home, I don't see how this helps the economy. Or what if a bank has to take over a home because of a bad mortgage or bankruptcy and then in additions need to do these improvement to sell the inventory? I don't see how that improves the bailout situation. What about buyer beware? The tax on its own should cause people to upgrade to more energy efficient technology, right, do we need this (inspection) also?
6 July 2009
at 6:08 p.m.

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Skeptical (Anonymous) says…

I wanted to point out something else about current wind turbine technology. Even after building 6,000+ wind generators, Denmark wasn't able to take a single fossil burning plant offline i.e. negligible CO2 reduction.
It all comes down to when power can be generated and when it is needed. Sometimes its not windy. Sometimes its dark. Sometimes its not windy and dark.
jackbinkelman- The MARS system you pointed to is interesting. At least it addresses a lot of the shortcomings of existing wind turbines.
6 July 2009
at 7:17 p.m.

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edjayhawk (Anonymous) says…

Mr. Shewmon wants us all to believe this is against us the taxpayers, when he knows all along it is to protect unregulated, exploitative big business like most Republicans do.
6 July 2009
at 7:52 p.m.

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jumpin_catfish (Anonymous) says…

Those who voted for Obama have no right to complain about this tax hike and that's exactly what it is, a tax hike. I will be complaining long and loud. the global warming crisis is a man made pile of steaming donkey dukey.

6 July 2009
at 8:27 p.m.

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FreshAirFanatic (Anonymous) says…

Wind energy. Don't read this if you rely on emotion and feelings to make decisions. This is only for those who weigh cost vs. benefit, crunch numbers and think logically.

http://www.americanthinker.com/2009/0…
6 July 2009
at 9:07 p.m.

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deskboy04 (Anonymous) says…

I guess that after the tax goes through and everyone has even more trouble making ends meet, that the Republicans will look a lot better to people.
6 July 2009
at 9:08 p.m.

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wasawest (Anonymous) says…

sorry wind bags. do your research… wind energy isn't viable yet. lets use some common sense! what are we worried about? carbon dioxide… HMMM what is carbon dioxide. its life for plants so they can create oxygen! over the earth's history co2 levels have been much more than they are now. it is obsurbe and narcissitic to think that man kind is resposible for raising the earth's temp. the fact is the sun is what regulates the earths temp. stop drinkin the koolaid and educate yourselves! Global warming is nothing more than a lie! it is no more than a way to tax you more and control you. Im not saying we don't need to be responsible stewards of our earth, but co2 taxing or cap and trade( which if you research it is nothing more than a hugh tax) is not the answer. Just look at Europe's system. they have it and haven't decreased thier inert gas emmissions(co2) one bit, however they are paying a lot more for their energy and have lost a lot of freedoms! LIBS stop it with the global warming garb cause thats all it is! TRASH!

FYI read Glenn Beck's Commonsence and Listen to him and Rush! they have the answers to save our country before the Libs turn us into a Marxist society!
6 July 2009
at 9:37 p.m.

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Pilgrim2 (Anonymous) says…

“Cap-and-trade would be a crippling, self-inflicted wound. Not only that, it would be futile: Without the cooperation of rapidly industrializing economies such as India and China — which say they have no intention of impeding their growth with carbon caps — anything the United States does will have little effect on overall global emissions.

“Nor is it likely to work as its authors intend.

“Like any commodity, the price of carbon permits will fluctuate, and those price movements could be violent. That will add even more uncertainty to the business of energy production.

“In Europe, the recession has caused the price of carbon permits to plummet, lowering permit costs and the cost of using fossil fuels. That has undercut the competitiveness of solar, wind and other new technologies aimed at boosting conservation.”

http://www.kansascity.com/273/story/1…
6 July 2009
at 9:40 p.m.

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Pilgrim2 (Anonymous) says…

mary_jane (Anonymous) says…

The intention of the Cap and Trade bill is to reduce CO2 in the atmosphere. If you haven't noticed, the icebergs are melting. The ill effects of climate change are for real and they are happening now and with more and more severity. Hide your head in the sand all you want but this is reality. We can continue on our way and not give a crap or we can do something. Maybe instead of blaming a democrat for his effort to cut greenhouse gas emissions you can can take responsibility for your part and switch out your lightbulbs for ones that are more energy efficient. There are tons of ways to make your home less dependent on coal and many are even tax deductable. (That means you're paying less taxes). Cool.
**************************************

“What’s more interesting is the change in approach. Up to now, the usual rationale for a carbon cap is that, yes, it would involve economic pain, but we have to understand that the short-term costs would be far less than the dire, long-term consequences of doing nothing about global warming.

“Now we’re told there won’t be any economic pain at all. Obviously, the two arguments are contradictory. In fact, Obama’s latest tack is refuted by statements he made earlier this year, when he remarked that under his cap-and-trade plan, “electricity rates would necessarily skyrocket.”

“How do you end up with a vibrant economy and lots of net job creation by forcing people to pay higher energy prices? Well, you don’t, and that’s why this measure is one of the biggest threats to the U.S. economy ever to emerge on Capitol Hill.”

http://www.kansascity.com/273/story/1…
6 July 2009
at 9:42 p.m.

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Pilgrim2 (Anonymous) says…

mary_jane (Anonymous) says…

The Congressional Budget Office estimates the average family will pay an additional $175 per year under the new CAP and Trade policy.
*************************************

“The notion that cap-and-trade will do little harm came from a recent Congressional Budget Office analysis that pegged the bill’s annual cost in 2020 at a mere $175 for the average family. (Lower-income households would get a rebate reducing their energy costs by $40.)

“The Heritage Foundation pointed out that incredibly the CBO study failed to include in its calculations the overall effect on economic growth. The bill would not only make energy prices go up, but — because energy costs raise production costs generally — it would make the prices of almost everything else rise as well.”

http://www.kansascity.com/273/story/1…
6 July 2009
at 10:01 p.m.

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logicsound09 (Anonymous) says…

wasawest,

You lost me at “Glenn Beck's Commonsense”.

Not to mention the inherent difficulty I have in trusting anyone who implores me to “educate myself” while using words like “obsurbe” (absurd) “narcissitic” (narcissistic) and “hugh” (huge).

Yes, plants need CO2 to survive, and yes, CO2 has been higher in the history of the globe than it is now. I guarantee that life will go on no matter what we do, but the question is what will that quality of life be like.
7 July 2009
at 1:46 a.m.

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mary_jane (Anonymous) says…

Whether you like it or not, our economy and our national policy on energy must change. The old way has failed. Miserably. The crusty old guys from Enron, GE and Haliburten and their predecessors have made their soot smeared mark on the world and now the rest of us have to pay for it. You know the cliche about passing on debt to our grandchildren? Well, we're them. http://greeninc.blogs.nytimes.com/200…

7 July 2009
at 7:38 a.m.

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Pilgrim2 (Anonymous) says…

mary_jane (Anonymous) says…

Whether you like it or not, our economy and our national policy on energy must change.
***************************************

So just write the check, regardless of the amount, and write it now. Typical looney left thinking.

Welcome to the Third World. That's all we'll have left once people like you are done with us.
7 July 2009
at 8:16 a.m.

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FreshAirFanatic (Anonymous) says…

and mary_jane…have you checked to see how much profit GE stands to make from this deal? Who do you think manufactures wind turbines? A bunch of family-owned, local businesses…

This just can't be about proft…
7 July 2009
at 12:51 p.m.

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snap_pop_no_crackle (Anonymous) says…

Barry says, “Here's some smoke. Here's a mirror. Now give me all your money, citizen.”