Sloan: Clean Power Plan leaves gaps for states and utilities to fill

On a bright summer afternoon, Rep. Tom Sloan sat down for lunch in a restaurant in a west Lawrence shopping center.

Looking out the window at the surrounding stores and supermarkets, with the sun beating down on their rooftops, he talked about how Kansas is missing a big opportunity to transform all that sunlight into electric energy, at least during the hottest part of the day, when the state’s coal- and nuclear-powered electric plants are churning at full capacity.

“The technology is there,” Sloan said.

What’s missing, he said, are state laws and regulations that would make it feasible for large commercial properties, such as a Dillons supermarket, or even a National Guard armory, to collect that power and either use it or sell it in a way that would justify the expense.

Sloan, a moderate Republican who represents much of west Lawrence, is a quiet voice in the Kansas Statehouse these days, often out of step with the more conservative Republicans who control the House leadership.

But when it comes to energy and utility policy, Sloan, a former vice chairman of the House Utilities Committee, is often heard loudly and clearly in places beyond the Statehouse, in rooms where national policymakers are engaged in long-range planning about the nation’s energy future.

Clean Power Plan

Sloan serves on several national advisory committees to agencies like the Department of Energy, the Federal Energy Regulatory Commission, or FERC, and the National Conference of State Legislatures that deal with state and national energy policy.

So when the Environmental Protection Agency this month rolled out its new Clean Power Plan, which aims to reduce carbon emissions from power plants by 30 percent from their 2005 levels within the next 15 years, Sloan said he knew what it would mean for the state, and he thinks Kansas is far from ready to meet those goals.

In June, weeks before the Clean Power Plan was unveiled, Sloan spoke at a meeting of the Department of Energy’s Electricity Advisory Committee about the use of new technologies to improve the reliability of the nation’s electric grid.

Sloan is a supporter of clean energy. And unlike many of the conservative leaders of his party in the Statehouse, he does not dispute the science that shows carbon emissions are a leading cause of global climate change. But he said it will take more to make clean energy a viable reality than simply putting limits on “dirty” power.

“You really need to run a nuclear plant full bore all the time,” he said. “Jeffrey Energy Center (near St. Marys) and LaCygne (in Linn County) are inefficient. That’s today. If you close the coal plants, and there are no (other) plants that are scheduled to be built, then it becomes more difficult.”

Distributed energy

“One of the many committees I serve on was created by the Department of Energy, and it’s called GridWise Architecture Council, or G-WAC,” Sloan said. “We work on how distributed energy can fit into the system. Part of it’s engineering, and we don’t do that. We do the conceptual stuff. How do you saddle up the marketplace so customers and utilities are negotiating with each other?”

Pausing from his sandwich, Sloan looked out the window of the restaurant. “You take the strip mall across the way,” he said. “If Dillons becomes a generator, why couldn’t they sell to J&S Coffee, or some other store? Then you get into, who’s going to make sure that the transactions are visible? Because the utility needs to know, and the (Kansas Corporation) Commission needs to know.”

Sloan said Kansas is far from having the kind of regulatory framework that would make such transactions possible. And currently, he said, electric utilities and the KCC are moving in the other direction.

The most notable example, he said, is the ongoing Westar Energy rate request being heard at the KCC. Originally, Westar had asked to add a surcharge onto bills of residential customers who generate some of their own power through rooftop solar and other home systems.

Westar’s argument was that those customers still rely on being connected to a power grid. But if they are allowed to reduce their bills dramatically through self-generation, the cost of maintaining a reliable power grid would fall on everyone else.

“Our concerns regarding customers with their own generation have potential to drive up costs for other customers,” said Westar spokeswoman Gina Penzig. “Our feeling all along has been that those who are benefiting from the power grid should share in the cost.”

But environmental groups, along with a Lawrence-based company that makes and installs solar panels, strongly objected to that, saying the proposed surcharge would take away the financial incentive to install such systems, potentially putting those companies out of business.

“Instead of raising mandatory fees, we encourage Westar to charge customers for the energy they use,” said Dorothy Barnett, director of the Climate and Energy Project, a statewide environmental group based in Hutchinson. “This is the best way to preserve incentives to use less energy and avoid burdening those Kansans who use the least energy with a disproportionate amount of the cost.”

As part of a proposed settlement announced Aug. 6, Westar agreed to drop that surcharge request from the current rate case so it can be heard separately, after the company’s other rate requests are settled.

But Sloan said he believes Westar was right, that it does have to maintain a reliable system, and that all customers should contribute to that cost. And he said Americans, including those in the environmental movement, may need to accept the fact that electricity will cost more in the future, and that customers may have to start prioritizing their spending decisions.

“Look at people’s electric bills, and compare it to their cable bills. And especially the (combination) plans,” he said. I’ve got voice, data and television that costs about $300 a month. It’s a lot more than my electric bill. Is this worth it?”

State legal challenges

On Friday, Kansas Attorney General Derek Schmidt announced he had joined 15 other states in filing a new legal challenge to the Clean Power Plan, arguing that the EPA lacks the legal authority to make such regulations.

“This regulation appears to have more to do with rushing to restructure the energy sector of the American economy than with protecting the environment,” Schmidt said in a statement released Friday. “If that sort of dramatic and costly restructuring is warranted, it should be decided by the people’s elected representatives in Congress, not by unelected bureaucrats at the EPA. This unaccountable, government-knows-best approach smacks of central economic planning. The agency’s rush to force states to implement its new directives makes the whole process even more suspect.”

Sloan, however, said he believes the EPA not only has the authority, but that such challenges by states are a waste of time.

“Utilities have to make decisions,” he said. “Attorneys general can file lawsuits, but if utilities are going to be subject to fines of $10,000 a day, they need to be making investment decisions.”

He pointed to a recent U.S. Supreme Court ruling on another recent EPA regulation, the “Mercury and Air Toxins Standards,” or MATS, a regulation that Schmidt’s office also took part in challenging.

Schmidt claimed victory in that case because the court overturned the regulations, saying EPA should have taken costs into account before issuing the new rules.

But Sloan said the more important result was that the court upheld EPA’s authority to regulate mercury emissions.

“That tells me that the court’s probably going to rule that they can regulate carbon,” he said. “So we’re going to move in that direction. The question is the speed.”