Search Tips
 
Hot Stuff

 

FACT SHEET on KCC's Approval of KCP&L Energy Plan

1.

The KCC's decision is not responsive to incentives that the Kansas legislature put into place to develop the vast wind resources in the state. Earlier this year the Kansas legislature approved a new Kansas Transmission Authority intended to facilitate the construction of transmission lines that would help tap the vast wind resources of western Kansas.

Under the plan approved by the KCC, KCP&L will install Iatan 2, a new 850 Megawatt coal fired power plant. Capacity in excess of 500 MW will be sold to other utilities. At the same time KCP&L will be expanding the capacity of Iatan 1 by about 122 Megawatts. This means, considering capacity factors, KCP&L's Energy Plan results in 95% coal burning and only 5% wind power and cannot be considered forward looking or environmentally sustainable. KCP&L did not support the recent passage of the Kansas Transmission authority.

In addition the base load capacity from the new coal plant will dampen demand necessary for the development of a Kansas wind power industry. Economic development and jobs will mostly occur out of state for decades to come, paid for by Kansas dollars. Kansans currently sends some $2 billion out of state for its energy needs, most of which goes to buy coal from Wyoming to burn in electric generating plants.

   
2.

Both KCP&L and the KCC overlooked the growing alarm concerning the very real costs of global warming. They dismissed the fact that sentiment is increasing for a "carbon" tax" that could be levied even before Iatan 2 is completed. For example the California Public Service Commission now requires its largest utilities to incorporate a carbon tax cost additive of $8 per ton of CO2 emissions in their long range planning studies. This carbon tax increment is in place to ensure that the utilities make the correct choice when deciding how to augment their generating capabilities. The KCC has not followed California 's lead and is exposing KCP&L's customers to a significant risk of rate increases if and when a carbon tax is implemented.

The KCC's decision means the health and welfare of our grandchildren will be imperiled by at least another 6 million tons per year (for 50 years) of greenhouse gases from KCP&L's Energy Plan.

   
3.

The Plan approved by the KCC includes an unprecedented provision called CIAC, or Contribution in Aid of Construction. This provides for additional funds from ratepayers to ensure that KCP&L's balance sheet meets financial standards set by Wall Street interests. In effect it amounts to a new subsidy for burning coal because it saddles the ratepayer with the increased risks associated with the huge cost and long lead time of a new coal fired power plant.

In turn, it negates the advantages of using alternatives to building a huge new coal plant which are energy conservation programs, purchased power, peaking combustion turbines and wind power which, while itself capital intensive, can be installed in small increments in only two years or less as demand requires. CIAC, then, is another environmentally damaging element of the Plan approved by the KCC. Further it creates a strong precedent that other large utility companies will utilize to build yet more huge coal plants in the future.

   
4. The KCC's decision is not responsive to incentives put in place by new federal energy legislation which extends the production tax credit for wind power through 2007. During the proceedings KCP&L acknowledged that their model showed that ratepayers would be better off with more wind power in the plan. This means KC metro area ratepayers will be paying more for electricity than necessary.
   
5. During the proceedings KCP&L acknowledged that their estimated shortfall of generating capacity did not reflect the 170 MW in peak load reductions expected from their proposed demand management pilot plan. Nor did they mention the up-rating of Iatan 1 by 122 MW. We believe a more aggressive program could further reduce peak demand. Any remaining peak needs could be met by purchased power and increments of wind power. This, plus KCP&L's dubious load forecast, leads us to believe the need for a new coal plant could be put off for at least several more years than planned without a significant increase in costs to ratepayers.
   
6. The KCC's decision means Kansas rate payers are placed at risk from rising prices of Wyoming coal which can now be passed through to ratepayers. We also note that KCP&L currently has to conserve coal because of supply interruptions and the tenuous condition of the 900 mile long supply line from Wyoming coal mines. Kansas electricity rates are also vulnerable to the massive increase in the cost of diesel fuel which is required to run the constant procession of coal unit trains to Kansas City.
   
7. The KCC's decision means that more mercury will be emitted into the region's environment and further imperil children born from the one in six women of childbearing age identified at risk in the US by the Centers for Disease Control.
   

Press Release:

Press Release
Contact: Brooks Albery
October 24, 2005
913-484-4556

Sierra Club Challenges KCC's Decision to Approve KCP&L's Coal Plant

On Friday, October 21, the Sierra Club filed a Petition for Judicial Review of the Kansas Corporation Commission's (KCC) decision in August to approve a Stipulation & Agreement (Agreement) filed by Kansas City Power & Light (KCP&L), the KCC staff, and two intervening parties. The Petition was filed in Kansas state District Court in Shawnee County. The Agreement, among other measures, includes a plan to build an 850 MW coal-burning power plant just north of Weston Missouri.

The Sierra Club is asking the Court to review the legality of an unprecedented provision in the agreement, called CIAC or Contribution in Aid of Construction, which has not been approved by the state legislature as a means for utilities to pay for the construction of electric generating facilities. CIAC provides KCP&L with additional funds during the construction of the new coal-burning plant and allows KCP&L to enjoy higher revenues and earnings, funded by KCP&L's rate payers.

CIAC imparts an adverse environmental impact on Kansas rate payers because it gives an unfair financial advantage to KCP&L for the construction of their large and costly coal-burning power plant. Large coal-burning power plants take a long time to design and build, as opposed to smaller and quicker investments in energy efficiency and less polluting electric generating alternatives such as wind. Building a large coal-burning power plant requires substantial financial stability in order to attract the necessary capital for a utility to construct such a plant. The KCC's approval of KCP&L's "resource plan", containing the CIAC funding mechanism, creates a precedent that burdens rate payers with higher rates and more pollution in the Kansas City area.

Sierra Club, along with Concerned Citizens of Platte County, also filed a Petition for Judicial Review in a Missouri district court last month to challenge a similar Agreement approved by the Missouri Public Utility Commission.

A full list of the Sierra Club's concerns with the Agreement is available at our Fact Sheet online at (URL) http://kansas.sierraclub.org/kcpl.htm. For more information contact Brooks Albery, Chair of the Kansas of Sierra Club's Energy Committee, at 1-913-484-4556.