Hill Heat: Tag coal

Citing Threat Of Global Warming, Georgia Judge Blocks Coal Plant

Wonk Room — Tue, 01 Jul 2008 08:59:00 -0500

In a landmark victory in the battle to regulate global warming pollution, a Georgia judge ruled that a proposed coal-fired plant could not be built unless its carbon dioxide emissions are limited, effectively killing the project. The ruling is the first to apply the Supreme Court’s Massachusetts vs. EPA decision to the question of greenhouse gas pollution from power plants. According to GreenLaw, the Georgia environmental organization who filed suit with the Friends of the Chattahoochee and the Sierra Club in June 2007, Fulton County Superior Court Judge Thelma Moore’s decision “goes a long way toward protecting the right of Georgians to breathe clean air.”

The decision overturns an administrative court’s ruling that affirmed the state Environmental Protection Division’s (EPD) decision to issue an air pollution permit for Dynegy’s Longleaf plant. In practical terms, Dynegy cannot begin construction of the plant unless it can obtain a valid permit from EPD that complies with the Court’s ruling. The Judge held that EPD must limit the amount of carbon dioxide (CO2) emissions from the plant, a decision that will have far-reaching implications nationwide; this is the first time since the April 2, 2007, Supreme Court decision requiring the Environmental Protection Agency to regulate CO2 that a court has applied that standard to CO2 from an industrial source rather than from motor vehicles.

The $2 billion, 1200 megawatt plant – the first proposed in Georgia in over 20 years – was to be built by Dynegy Inc., the Houston-based energy company with several other proposed coal-fired power plants across the country. Dynegy and other fossil fuel polluters have been scrambling to get new plants started in anticipation of future limits on greenhouse gases, before investors and ratepayers recognize the risk.

Last October, the Kansas Department of Health denied air quality permits to a proposed coal plant expansion because of the danger greenhouse gas emissions pose to the climate. Gov. Kathleen Sebelius (D-KS) vetoed repeated attempts by the legislature to override the decision.

In contrast, officials recently appointed by Gov. Timothy Kaine (D-VA) to the Virginia Air Pollution Control Board unanimously granted air quality permits to Dominion Resources for a $1.8 billion coal-fired plant last week.

The court decision unequivocally rules that carbon dioxide must be regulated:

Faced with the ruling in Massachusetts that CO₂ is an “air pollutant” under the Act, Respondents are forced to argue that CO₂ is still not a “pollutant subject to regulation under the Act.” Respondents’ position is untenable. Putting aside the argument that any substance that falls within the statutory definition of “air pollutant” may be “subject to” regulation under the Act, there is no question that CO₂ is “subject to regulation under the Act.”

Virginia Approves Major New Coal Plant and Electricity Rate Hikes

The Cunctator — Fri, 27 Jun 2008 16:11:00 -0500

The Guardian reports:

The No 2 utility owner in America yesterday won the right to build a $1.8bn power plant in the heart of the Appalachian mountains. The move almost certainly will increase Virginia’s use of the mining practice known as mountaintop removal, in which peaks are sheared off to reach the coal inside.
After an emotional two-day hearing that drew hundreds of witnesses, the Virginia state air pollution control board cleared Dominion Power to break ground on a 585-megawatt plant deep in the heart of coal country.

The vote was unanimous, with even board members who favor a carbon tax calling for more coal to burn.

Today:

Dominion Virginia Power will raise its electricity rates starting Tuesday by 18 percent, the largest one-time rate increase in three decades, to pay for soaring fuel costs. The three-member Virginia State Corporation Commission, the state’s utility regulator, approved the increase in a ruling issued Friday.

It’s Getting Hot in Here has commentary:

Today was the final day of the Air Board Hearing concerning the Wise County coal plant. The room was full of hope after yesterday’s comment period, and the board acknowledged the powerful citizen outcry over the plant’s health and environmental impacts. But ultimately, they approved the plant. While they significantly strengthened the emissions regulations, they did nothing to address mountain top removal mining or CO2 emissions.

They went as far as they could, without doing more harm than good. Fearing litigation from Dominion, they made no strong statement about regulating CO2—without the regulatory framework from the EPA, the Board felt it wasn’t able to take a strong stand. “My hope is,” stated one Air Board member, “that strong, forceful legislation will come at a federal level and that Governor Kaine will take state-specific actions to address CO2.”

It was because of the “loud public clamor” that the Air Board decided to take up this permit and make it as strong as it is now. Dominion will have to make a considerable effort to meet these demands, including cleaning up their mercury emissions. Dominion walked in the door expecting that their permit would get rubber-stamped approved with a 72 lb mercury emissions regulation. The Air Board demanded that they reduce that to 4.45 lbs per year. That’s a 120% reduction, made possible only by the strong grassroots outcry about this plant.

It was clear to me and other members of our coalition that this was a courageous move by the Air Board. They are going to take hits from both sides of the debate, neither of which got what they wanted. As Kathy Selvage said, “They gave no consideration for the mountains that will be the fuel for this plant.” MTR wasn’t mentioned by the Air Board at all. Also, the “out clause,” which allows Dominion to get a new permit if they cannot achieve the mercury standards, was also left in.

“There you go. We didn’t do it.,” said one Air Board member in his final comments. They didn’t take a strong stand on MTR, on CO2, or on the plant. But they did create a strong regulatory hurdle for Dominion, and they made an attempt to protect our air based on the Clean Air Act. The vote was unanimous.

Ten Democratic Senators Voice Industry-Based Concerns With Climate Legislation

Wonk Room — Thu, 12 Jun 2008 14:01:00 -0500

From the Wonk Room.

The ten Democratic signatories: Debbie Stabenow & Carl Levin (MI), Mark Pryor & Blanche Lincoln (AR), Evan Bayh (IN), Sherrod Brown (OH), Jay Rockefeller (WV), Jim Webb (VA), Claire McCaskill (MO), and Ben Nelson (NE). Download the letter.

Ten Democratic senators echoed polluters in a letter sent to Sen. Barbara Boxer (D-CA) about her filibustered climate change legislation last Friday. The senators, nine of whom supported cloture to end debate and vote on amendments, wrote, “We commend your leadership in attempting to address one of the most significant threats to this and future generations; however, we cannot support final passage of the Boxer Substitute in its final form.” Their letter continues:

To that point we have laid out the following principles and concerns that must be considered and fully addressed in any final legislation.

The senators’ letter uses practically the same talking points and specific policy demands as the industry polluters who fought to kill the legislation, in particular the industry lobbying groups American Coalition for Clean Coal Electricity (ACCCE) and the National Association of Manufacturers (NAM). A review of the letter reveals the Boxer substitute (S. Amdt. 4825 to the Lieberman-Warner Climate Security Act, S. 3036) already made concessions to these parochial and fossil-industry demands:

Point #1: “Contain Costs and Prevent Harm to the U.S. Economy.”

Fossil Ten Senators	“While placing a cost on carbon is important, we believe that there must be a balance and a short-term cushion when new technologies may not be available as hoped for or are more expensive than assumed.”
ACCCE	“Protect American consumers and the U.S. economy through effective cost-containment measures.”
NAM	“Include a safety valve or other equally effective and responsive cost-containment mechanism . . . Support economic growth and do no harm to U.S. economy.”

Commentary: Lieberman-Warner already included a significant “transition assistance” in the form of free permits to polluters [Secs. 541 – 572], borrowing (15 percent of obligation) [Sec. 511] and offset provisions (30 percent of obligation) [Title III], and a “cost containment” auction that would contain the price of seven percent of all allowances sold to polluters [Sec. 522]. A “carbon market efficiency board” is given the authority to loosen restrictions on borrowing and offset use—but not to tighten them [Sec. 521]. What’s left is even greater permit giveaways or “safety valves” that would allow polluters to bust the cap.

Point #2: “Invest Aggressively in New Technologies and Deployment of Existing Technologies.”

Senators	“It is critical that we design effective mechanisms to augment and accelerate government-sponsored technology R&D programs and incentives that will motivate rapid deployment of those technologies without picking winners and losers. We also want to include proposals to provide funding for carbon capture and storage and other critical low carbon technologies in advance of resources being available through the auction of emission allowances.”
ACCCE	“Guarantee, through public-private sector partnerships, aggressive, near- and long-term investments in new, advanced technologies that 1) avoid or reduce CO2 emissions, 2) capture, transport, and safely store CO2, and 3) use CO2 in beneficial ways, whenever practical.”
NAM	“Promote advanced, energy efficient and zero-and-low-GHG emission and sequestration technologies as part of a long-term strategy.”

Truth: The Fossil Ten claim they don’t want to pick “winners and losers” but then call for special support for “carbon capture and storage”—an important but experimental coal industry technology that already received special consideration under the Boxer substitute. In fact, the Boxer substitute called for a special “Kick-Start for Carbon Capture and Sequestration” fund that would go into effect within 120 days, years before emissions reductions would have to take place [Sec. 1005]. Evidently that’s not enough.

Point #3: “Treat States Equitably.”

Senators	“The allocation structure of a cap-and-trade bill must be designed to balance these burdens across states and regions and be sufficiently transparent to be understood.”
ACCCE	“For example, if a cap-and-trade program were to be implemented, it would be essential to have fair and equitable allocation of emission allowances.”
NAM	“Be equitable and economy-wide in scope”

Commentary: Lieberman-Warner reserved three to four percent of allowances for states with high manufacturing and coal mining, in an admittedly complex formula [Sec. 602]. Another one percent of allowances would go to Alaska [Sec. 624], and four to seven percent of allowances to the other 49 states, divied up for coastal states, Indian tribes [Sec. 625], and wildlife restoration [Sec. 631], for adaptation efforts in coordination with the Secretary of the Interior. In addition, significant funding is allocated to American automobile manufacturers [Title XI] and the coal industry [Title X]. Of course, “equitable” and “designed to balance” is in the eye of the beholder.

Point #4: “Protect America’s Working Families.”

Senators	“For instance, one way to provide some relief would be to provide additional allowances to utilities whose electricity prices are regulated, which would help to keep electricity prices low.”
American Electric Power Service Corporation	“AEP feels strongly that the electric sector should receive emission allowances commensurate with its pro rata share of the emission caps in the legislation, whether emissions are regulated upstream or downstream.”

Commentary: Even though experts agree allowances should be auctioned, Lieberman-Warner already provided such utilities with free allowances – 18 percent of all initial permits given away for free to fossil-fueled electricity generators [Sec. 551]. Furthermore, the bill already had significant assistance provisions for American families: a tax rebate fund that grows from 3.5 percent of permits to 15 percent in 20 years [Sec. 582], 13 percent of allowances reserved for local distribution companies to provide support to low- and middle-income consumers [Sec. 601], and the aforementioned assistance to states.

Point #5: “Protect U.S. Manufacturing Jobs and Strengthen International Competitiveness.”

Senators	“The final bill must include enhanced safeguards to ensure a truly equitable and effective global effort that minimizes harm to the U.S. economy and protects American jobs. Furthermore, we must adequately help manufacturers transition to a low carbon economy to maintain domestic jobs and production.”
NAM	“Give consideration to industries exposed to foreign competition if a U.S. climate change policy creates competitive disadvantages.”

Commentary: As the senators’ letter recognized, Lieberman-Warner already has a “mechanism to protect U.S. manufacturers from international competitors that do not face the same carbon constraints [Sec. 1306].” And Lieberman-Warner already reserved 11 percent of allowances for the first ten years of the program to be given away for free to carbon-intensive manufacturers [Sec. 541].

Point #6: “Fully Recognize Agriculture and Forestry’s Role.”

Senators	“Strong, aggressive and verifiable offset policies can fully utilize the capabilities of our farmers and forests.”
ACCCE	“Allow broad use of verifiable actions to offset manmade greenhouse gas emissions. Use of verifiable offsets (from domestic or international action), should be unlimited because they help achieve cost-effective reductions in manmade greenhouse gas emissions. . . Programs such as terrestrial carbon sequestration, conservation, and energy efficiency are important domestic and international tools to reduce the carbon footprint of greenhouse gas emitters.”
Edison Electric Institute (EEI)	“Provide for the robust use of a broad range of domestic and international GHG offsets.”

Commentary: Lieberman-Warner already included “strong, aggressive and verifiable” offset policies – 15 percent each for domestic and international projects. Behind the rhetoric of “farmers and forests” lies the reality that the most easily verifiable offsets come from methane emissions from coal mining and industrial agriculture waste ponds – practices that should be dealt with for other safety and health reasons. As the restrictions on offset use are loosened, the regulatory infrastructure needed to verify offsets increases. The pollution industry would like to see offset usage be unlimited, which would require a complex new regulatory bureaucracy that the polluters would oppose tooth and nail.

Point #7: “Clarify Federal/State Authority.”

Senators	“Congress should adopt a mandatory federal cap-and-trade program that will be the single regulatory regime for controlling greenhouse gas emissions.”
ACCCE	“Avoid a patchwork of conflicting standards or duplicative programs through the adoption of a uniform federal program.”
NAM	“Preempt all state climate change laws”
EEI	“Provide certainty and a consistent national policy”

Commentary: Lieberman-Warner would distribute four percent of allowances (growing to ten percent by 2032) to states who “show leadership” on reducing emissions—but only those that do not have a conflicting cap-and-trade program. The senators are joining the Bush administration in the attempt to block and preempt state-level regulation of greenhouse gases.

Point #8: “Provide Accountability for Consumer Dollars.”

Senators

“The cap and trade program developed in the Lieberman-Warner bill has the potential to raise over $7 trillion. Much of these funds will be indirectly paid for by consumers through increased energy prices. The federal government has a fundamental obligation to ensure these funds are being spent in a responsible and wise manner. The development of any cap and trade program must recognize the sensitivity of this obligation and eliminate all possibility of waste, fraud or abuse.”

American Petroleum Institute

“Be transparent and understandable to all consumers and stakeholders.”

Commentary: Considering that these senators are also calling for federal preemption of stronger state regulations, greater subsidies for the coal industry, electric utilities, and manufacturers, and even greater “cost-containment” provisions than those already in Lieberman-Warner, it’s hard to imagine what they consider to be “responsible and wise” spending or the elimination of “waste, fraud or abuse.”

Sen. Boxer’s version of Lieberman-Warner attempted to satisfy these kinds of demands as well as progressive principles espoused by other senators. Download the This letter.

The Department of Energy's FutureGen Program

The Cunctator — Tue, 15 Apr 2008 10:00:00 -0500

On January 31, 2008, the Department of Energy (DOE) announced a significant departure from its clean coal initiative, FutureGen. Originally conceived in 2003, FutureGen was touted as a pollution-free power plant of the future intended to showcase cutting-edge technologies to address climate change and advance the President’s hydrogen initiative.

Panel I

C. H. “Bud” Albright, Under Secretary of Energy, Department of Energy

Panel II

Jeffrey N. Phillips, Program Manager, Advanced Coal Generation EPRI
Ben Yamagata, Executive Director, Coal Utilization Research Council
Paul W. Thompson, Senior Vice President, Energy Services, E.ON U.S. LLC

Coal Gasification Technologies and the Need for Large Scale Projects

The Cunctator — Wed, 09 Apr 2008 14:30:00 -0500

Coal gasification can provide an efficient, clean, and versatile way to generate electricity and other energy products from coal as an alternative to traditional generation methods. The process allows for the removal of pollutants such as sulfur and nitrogen compounds that contribute to smog and acid rain, and the capability to capture carbon dioxide without releasing it into the atmosphere. The Subcommittee will examine coal gasification technologies, including the challenges and advantages over traditional technologies, and the need for large scale integrated gasification combined cycle (IGCC) demonstration projects that feature carbon capture and sequestration.

Witnesses

John Marburger III, Director, Office of Science and Technology Policy, Executive Office of the President
James Childress, Executive Director, Gasification Technologies Council
Joseph P. Strakey Jr., Chief Technology Officer, U.S. Department of Energy, National Energy Technology Laboratory
Michael J. Mudd, Chief Executive Officer, FutureGen Alliance, Inc.
David Hawkins, Director, Climate Center, Natural Resources Defense Council
Mr. John Novak, Executive Director, Federal and Industry Activities, Environment and Generation, The Electric Power Research Institute

Celebrate Appalachia

The Cunctator — Tue, 08 Apr 2008 18:00:00 -0500

Please join mountain lovers from across the country to:

Celebrate Appalachia

Join citizens in the fight to protect their communities from mountaintop removal mining.

Reception Hosted By:

The Alliance For Appalachia

Appalachian Citizens Law Center * Appalachian Voices * Appalshop * Coal River Mountain Watch * Heartwood * Kentuckians For The Commonwealth * MACED * Ohio Valley Environmental Coalition * Save Our Cumberland Mountains * Sierra Club Environmental Justice Program * Southern Appalachian Mountain Stewards * Southwings * West Virginia Highlands Conservancy

With special thanks to:

Alaska Wilderness League, Appalachian Center for the Economy and the Environment, Chesapeake Climate Action Network, Christians for the Mountains, EarthJustice, Environment America, Friends of the Earth, Natural Resource Defense Council, Rainforest Action Network, and the national Sierra Club.

RSVP to J.W. Randolph at (202) 669-3670 or jw@appvoices.org

Kansas, Bleeding Carbon Emissions, Looks to the Outback-Bound EPA

Warming Law — Fri, 04 Apr 2008 12:32:00 -0500

Reports from Kansas this morning indicated that today, state legislators would attempt to overturn October’s denial of construction permits for two coal-fired power plants by the administration of Governor Kathleen Sebelius—which has cited concern over global warming impacts and a desire to move instead toward clean energy solutions. (UPDATE: Literally just as we were publishing this post, the bill fell short of a veto-proof majority by a single vote.) Sebelius recently vetoed similar legislation, which would also significantly amend state anti-pollution law to strip regulators of the ability to factor in CO2 emissions, instead tethering their authority to the federal government’s position on GHG-related harm. Legislative supporters have laden their efforts with a handful of green-friendly provisions in order to ~~greenwash their intentions~~ dub the bill a "compromise," and claimed to have finally lined up enough support to override the governor, "unless someone lied to [House Speaker Melvin Neufeld]."

It’s painfully ironic that Kansas might move the ball into the EPA’s court, given the past week’s news, and considering that state officials recently told Congress that the Bush administration’s intransigence has helped bring about this fiasco. Our earlier favorable comparison between KS environmental honcho Roderick Bremby and EPA Administrator Stephen Johnson is also amplified by their divergent reactions to the hot seat: the former has publicly defended his decision, while the latter has infamously decided to dodge congressional testimony and subpoenas in Australia.

Finally, it bears mention that the full might of the anti-climate-regulation/denialist machine has been brought to bear on this issue (who can forget the infamous Ahmadiejad/Chavez/Putin ads?). An overwrought editorial in today’s Wall Street Journal—not that there’s any other kind from them on this topic, as Solve Climate has assiduously documented—accuses Sebelius of acting as though she were opposing "crimes against humanity" for daring to mention the moral implications of climate change (much in the same way the Supreme Court has). The current legislation was also greeted by an onslaught of Washington lobbyists testifying on its behalf, including former EPA official turned "Dirty Rotten Scoundrel" Bill Wehrum and born-again consumer-safety advocate Grover Norquist.

Enviros Criticize, Fete Ken Lewis of Bank of America For Climate Influence

Wonk Room — Fri, 04 Apr 2008 07:04:00 -0500

Originally posted at the Think Progress Wonk Room.

Bank of America CEO Kenneth D. Lewis received two utterly different awards from environmental groups on Tuesday, April 1—the Energy Action Coalition and Rainforest Action Network (RAN) voted him the “Fossil Fool of the Year,” while the Natural Resources Defense Council (NRDC) honored him at their annual fundraising gala as a “Force for Nature.”

Rebecca Tarbotton of RAN said, “Ken Lewis faced a who’s who list of polluters, but voters deemed him the worst of a very deserving crop.”

Frances Beinecke of NRDC said, “We have the know-how to beat global warming. What we need is the leadership to make it happen, and Ken Lewis is providing that leadership.”

Climate and environmental activists celebrated “Fossil Fools Day” yesterday, April 1, with actions across the globe protesting the fossil fuel industry. Heeding Al Gore’s call for “young people to engage in peaceful protests to block major new carbon sources,” they blockaded coal mines, coal plants, and energy company headquarters.

As part of the day of action, the Energy Action Coalition dedicated the Fossil Fools Awards to “the world’s biggest contributors to our global addiction to fossil fuels.” Kenneth Lewis won top honors for facilitating “nearly $1 billion in loans to Massey Energy and Arch Coal, two of the largest companies involved in the environmentally devastating process of mountaintop removal coal mining” in the last few years. Bank of America also made several billion dollars in loans and facilitated stock offerings in 2006 for Peabody Energy, the world’s largest private coal company.

NRDC’s tenth annual “Forces for Nature” $1000-a-plate fundraising gala feted Ken Lewis and NYC mayor Michael Bloomberg at Cipriani 42nd Street.

NRDC honored Lewis for Bank of America’s ten-year, $20 billion environmental initiative which “addresses climate change by championing sustainable business practices through innovative lending and investing strategies, new financial products and services and operations.” The initiative was launched last year. The new Bank of America Tower in New York City, when completed in 2009, will be one of the most environmentally friendly and efficient office buildings in the world.

At the NRDC gala, Lewis made the major announcement that Bank of America would adopt the Carbon Principles, “a set of guidelines that help advisors and lenders to power companies evaluate and address carbon risks in the financing of projects” drafted in January by Citigroup Inc., J.P. Morgan Chase & Co., and Morgan Stanley. According to the Wall Street Journal, “the ‘Principles’ push utilities to explore other alternatives to regular coal plants . . . Still, the banks make clear they won’t stop funding all conventional coal plants—they’ll simply want assurances higher rates will cover likely costs of carbon.”

Making Carbon Capture & Sequestration Work

The Cunctator — Mon, 31 Mar 2008 13:00:00 -0500

Recognizing the heightened interest in carbon capture and sequestration (CCS) as a way to enable continued use of fossil fuels in emissions-intensive sectors of the economy, we invite you to a conversation on economic and other issues related to emissions-free energy and carbon mitigation technologies. The discussion, open to the public and press, is organized by the Senate Committee on Energy and Natural Resources, along with the Center for Strategic and International Studies, the British Foreign Office and the U.S. Mission to the European Union. Senate Energy Committee Chairman Jeff Bingaman (D-NM) will open the conference, which will feature energy experts from the international community, the private sector and academia. CSIS is a non-partisan, non-profit organization founded in 1962 and headquartered in Washington. It seeks to advance global security and prosperity by providing strategic insights and practical policy solutions to decision makers.

Welcome 1:00 – 1:15 p.m.

Frank Verrastro, director and senior fellow, CSIS Energy and National Security Program
Bob Simon, staff director, Senate Energy & Natural Resources Committee
Sen. Jeff Bingaman, chairman, Senate Energy & Natural Resources Committee

The Business Case for CCS 1:15 – 2:00 p.m.

Gardiner Hill, manager for Group Environmental Technology, BP (moderator)
Bruce Braine, vice president of Strategic Policy Analysis, American Electric Power Service
Craig Hansen, vice president, Washington Operations, Babcock and Wilcox
Stephen Kaufman, chair, Integrated CO2 Network (ICO2N) and director for business development, Suncor Energy

Sequencing the Deployment 2:05 – 2:50 p.m.

David Pumphrey, deputy director and senior fellow, CSIS Energy and National Security Program (moderator)
Jan Panek, head, Coal & Oil Unit, Directorate-General for Energy & Transport, European Commission
Jon Gibbins, Energy Technology for Sustainable Development Group, Imperial College, London
Jim Dooley, senior staff scientist, Pacific Northwest National Laboratory

Economics, Infrastructure and Scale Issues 2:55 – 3:40 p.m.

Shirley Neff, president and chief executive officer, Association of Oil Pipelines (moderator)
Kevin Book, senior analyst, Friedman, Billings, Ramsey Group, Inc.
Rachel Crisp, deputy director, Department for Business, Enterprise and Regulatory Reform, United Kingdom
Vince Hahn, principal and vice president, Global Asset Consulting, R.W. Beck, Inc.

Closing and Summary 3:45 – 4:00 p.m.

Report Vindicates Sebelius: Coal’s Cost Puts Kansans 'At Significant Risk'

Wonk Room — Wed, 26 Mar 2008 19:04:00 -0500

Originally posted at the Think Progress Wonk Room.

In October of last year, the administration of Kansas Gov. Kathleen Sebelius (D) denied permits for two new coal-fired plants in her state because the greenhouse gases such coal plants would emit constitute a threat to the environment and public health. Last Friday, she vetoed a legislative attempt to allow the plants to be built. Opponents of the veto claimed “the decision is costing the state jobs and economic investment” and warned of “higher electric bills for Western Kansas,” where the plants were proposed.

But a landmark report released yesterday by an esteemed financial research firm finds that, in fact, Sebelius has been acting in her state’s best economic interests.

Innovest Strategic Value Advisors finds that Sunflower Electric Power Corporation, the company whose proposal was denied, failed to account for the effects of the likely regulation of carbon dioxide on the cost of coal-fired electricity when it sought to build two 700 MW coal plants in Holcomb, Kansas:

Innovest examined the economics of the transaction and determined that under the most plausible regulatory scenarios the decision to build new coal generating capacity will put Sunflower Electric’s ratepayers – who in this particular case are the actual owners – at significant risk. The report concludes that Sunflower’s management has not adequately addressed the competitive and financial risks associated with climate change in deciding to pursue the expansion of its Holcomb Station power plant.

Sunflower was remiss in not considering that federal legislation that places a price on carbon emissions is extremely likely, considering the bipartisan support and strong international pressure for such action.

The report compares the economics of coal plants versus natural gas plants, which have a considerably smaller carbon footprint, and concludes:

In general, this analysis demonstrate that gas is the more financially sound choice for the construction of baseload generating capacity in all scenarios except 100% free allocation [to power companies] of carbon allowances.

It is thus unsurprising that the coal lobby attacked the natural gas industry when the decision was made.

The report also notes that western Kansas has “among the nation’s most abundant wind resources” and that the cost of wind power has plummeted 80% in the last 20 years.