Topping the news in Topeka last week was suspension of committee action on HB 2711, this year’s mega-energy bill. The House Utilities Committee had hearings all week on the bill and was scheduled to work the bill Friday. However, the bill picked up much opposition by both sides of the energy debate, with conservationists saying the bill did not go far enough and supporters claiming the bill had too many moving parts when all that was needed at this point were provisions providing regulatory certainty.
The bill stems from unprecedented action taken by Sec. of Health & Environment Bremby to apply emergency powers limited to existing plants to deny an original application for construction of two coal-fired energy plants near Holcomb. Sunflower had complied with all state and federal regulations and had been given a “thumbs up” by KDH&E staff only to have the Secretary block the permit, citing concerns over CO2 emissions. The statute he used clearly applies to plants already in existence and producing quantities of CO2. Incidentally, all the state’s coal-fired energy plants currently emit far more CO2 than the Holcomb plants would as the Holcomb plants would be state-of-the-art facilities. Each of these facilities’ air quality permits will be up for renewal in the next 5 years and the Secretary’s action has caused a great deal of regulatory uncertainty in the state, where investments in energy contribute substantially to the state’s economy. The Holcomb plants alone represent an investment of over $3B, with much of the energy production being sold out-of-state, making Kansas a net exporter of energy.
The bill, among other things, would clarify the current law regarding permitting and would provide a procedure for Sunflower to reapply. The Secretary would be prohibited from applying standards more stringent than those that exist under state or federal law. The bill, as originally introduced, would have established energy efficiency standards for newly constructed state owned buildings, including public schools, and state motor pool vehicles. It would have also set in statute carbon dioxide emission limitations with a carbon tax applied where emissions exceeded limitations. The later has received much criticism as such limitations are generally reserved to the rule & regulation process rather than statute and there is greater interest in providing financial incentives for conservation and efficiency than imposing yet another tax.
The Senate has identical legislation that appears to be moving forward. Look for House to be more deliberate in its approach, perhaps concentrating, for now, on the regulatory provisions of the original bill as this is where time is of the essence this session. I’ve been pulled in to work on the regulatory piece, with a view of looking at the bigger picture. This is not just about Sunflower’s desire to invest billions of dollars in new energy efficient plants in Western Kansas. What we do will affect all our energy plants and investments in all parts of the state and the air quality permits for existing plants come up for renewal in the next few years. Providing regulatory certainty to energy producers as well as reliable and affordable energy to consumers is vital.
Another issue that will receive much debate this session is immigration reform. At least a half a dozen bills have been filed or are in the process of being filed. Patterned after similar laws in such states as Arizona and Oklahoma, sponsors are trying to address illegal immigration issues being experienced by our neighboring states so that Kansas is not behind the curve. It is still uncertain whether Congress will try to pre-empt state laws but, up until now, Congress has failed to be anything more than hopelessly inconsistent with how it deals with illegal immigration. The cost of this uncertainty has fallen on the states and their taxpayers. I’ll be providing more on this issue as it develops this session.