Plans for billions of dollars in environmental upgrades to some of the state’s larger power plants will get a closer look.
Staff with the Kansas Corporation Commission have filed a petition to start investigating whether it made more sense to close down large, aging power plants to build new ones or to spend billions retrofitting the plants to meet pending environmental regulations.
The KCC staff will also look at whether the energy provided by the plants in question is needed and, if the upgrades are made, whether the utility has picked the best option.
Eventually the cost of making those environmental upgrades will be shouldered by energy customers.
“We have a fiduciary responsibility to make sure the upgrades are handled in the most efficient and effective way,” KCC spokeswoman Cara Sloan-Ramos said.
The upgrades are associated with the Environmental Protection Agency’s regulations for controlling pollutants that cause haze. Several years ago, the Kansas Department of Health and Environment pinpointed five coal-fired power plants that needed to make environmental upgrades to reduce haze.
They included two units in La Cygne, of which Kansas City Power and Light and Westar Energy share ownership, a Westar unit in Colwich and two more in St. Marys.
Among the most notable retrofits will be the one at the La Cygne power plant, which has to be completed by June 2015. In all, the upgrades would cost $800 million to $1 billion, an amount that would be split in half by KCP&L and Westar.
Chuck Caisley, senior director of public affairs for KCP&L, said the company believes making the upgrades to the 30-year-old plant to keep it running for several more decades is a sound decision. But he said the KCC filing is still a good thing.
“We think a conversation about this is good and healthy. If folks have other ideas, absolutely we would be willing to talk about them,” Caisley said.
Gina Penzig, a spokeswoman for Westar, said the company is still reviewing the petition to see whether it would affect any of its plans.
“This is something that is fully within their jurisdiction,” she said of the KCC filing.
Both the Kansas Chapter of the Sierra Club and the Kansas Citizens’ Utility Ratepayer Board support the KCC’s role in studying what options would work best.
Bill Griffith, chairman of the energy committee for the Sierra Club, said it’s a conversation that needs to take place.
“Why throw $800 million or more to do a retrofit to have a coal plant around for another 30 to 40 years when we realize coal is a bad thing to have out there?” Griffith said.
The Sierra Club likes the possibility that a coal plant could be replaced with something that is environmentally friendlier, like wind or natural gas.
For David Springe, consumer counsel for the Kansas Citizens’ Utility Ratepayer Board, building new plants might make more sense even without the environmental consideration.
With energy usage down from the recent recession, Springe said, utility companies have some breathing room before building more power generation.
“It’s a pure economic question. Does it make more sense to spend billions on old, dirty plants or build better, new, more efficient plants that are cleaner and cheaper?” Springe asked.
KCC staff will be working quickly on the issue so a policy can be in place before utilities bring cases before the board, KCC spokeswoman Sloan-Ramos said.