KCC Requests Order to Gather Information about Environmental Upgrades; KCP&L and Westar Energy plans to retrofit existing plants at issue

KCC Requests Order to Gather Information about Environmental Upgrades;
KCP&L and Westar Energy plans to retrofit existing plants at issue

Topeka, KS – The Staff of the Kansas Corporation Commission (KCC) filed a Petition today seeking a Commission Order to open a general docket intended to gather cost and engineering information regarding the generation capabilities of Kansas City Power and Light (KCP&L) and Westar Energy, particularly as these capabilities will be affected by state and federal environmental upgrade requirements.

At Issue

To continue operation of existing generation plants, KCP&L and Westar face environmental regulatory requirements for retrofits, presently estimated to cost billions of dollars.

KCC Staff wants to ensure the full scope of the environmental retrofit decisions and alternative options are considered, and, if necessary, ask the Commission to provide guidance to the utility companies before the commitment of resources.

According to KCC Staff, three fundamental questions are at issue:

Is the capacity and/or energy provided by the plant to be retrofitted needed by the utility?

If the capacity and/or energy is needed, then is the decision to retrofit a more economically efficient choice than decommissioning the existing plant and building a new plant?

If the retrofit choice is the better choice, then has the utility chosen the best retrofitting option?

In its Petition, KCC Staff contends these questions should be answered before the utilities incur obligations that could potentially be charged to ratepayers and before the commencement of construction executing the retrofitting decisions.

Background

Staff's action focuses on the expected costs of projects which are, or are likely to be, planned by the companies given the environmental requirements. Staff seeks to gather information about the costs of the planned projects as well as any alternatives which would be environmentally compliant. The project plans are a result of an extended period of environmental regulation:

1977 — The Clean Air Act (CAA) was amended to protect visibility in Class I designated areas (e.g., national parks, wilderness areas and international parks) from regional haze.

1980 — The Environmental Protection Agency (EPA) codified regulations addressing regional haze within designated Class I areas “reasonably attributable” to specific anthropogenic sources of pollution, referring to those pollution sources resulting from the influence of human beings on nature. States were required to determine which facilities should install Best Available Retrofit Technology (BART) to control pollutants contributing to visibility impairment in Class I areas.

1990 — The CAA was again amended, authorizing the EPA to conduct further research and to assess progress.

1999 — The EPA finalized the Regional Haze Rule requiring each state that contributes to visibility impairment to develop a state implementation plan (SIP) addressing regional haze visibility impairment.

2005 — The EPA amended the 1999 regulations and established guidelines for states to identify facilities subject to BART, to set presumptive emission limits for coal-fired electrical generating units (EGUs), and to determine the level of control technology required to implement BART. Using the methodology prescribed by the EPA's BART Guidelines, the Staff of the Kansas agency charged with carrying out these duties, the Kansas Department of Health and Environment (KDHE), identified the following five EGUs subject to BART controls under the Regional Haze Rule:

KCP&L: La Cygne 1 - La Cygne, Kan.

KCP&L: La Cygne 2 - La Cygne, Kan.

Westar: Gordon Evans 2 - Colwich, Kan.

Westar: Jeffrey 1 - St. Mary's, Kan.

Westar: Jeffrey 2 - St. Mary's, Kan.

News Release