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Murrel BlandMurrel Bland
Dave Alvey, the president of the Kansas City, Kan., Board of Public Utilities, can’t understand why the Environmental Protection Agency is insisting on unreasonable rules limiting greenhouse emissions caused by electrical power plants burning coal.
It isn’t that Alvey isn’t concerned about the environment—he is. His rationale is consistent with the position that the American Public Power Association takes. The APPA is the trade association that represents municipal electric power system including the BPU.
Alvey said APPA representatives asked EPA officials just how much air pollution the United States caused, compared to the rest of the world. The EPA officials said the United States was responsible for only 1 percent of the total pollution. The big polluters are India and China.
Alvey said EPA’s regulation, according to its own estimates, would cut U.S. air pollution in half. And that amount is suspect, Alvey said, as the pollution control equipment may require more energy to operate.
Coal is the most-cost effective fuel for electric power plants to burn. Estimates are that coal-fired plants supply from 40 to 50 percent of the electricity in the United States.
The BPU is faced with two very costly moves that inevitably will cost BPU ratepayers. A recent article in Bloomberg’s Business Week quoted coal industry sources that this EPA regulation could cost a 12 percent spike in utility rates.
The BPU recently purchased a 17-percent share in the Dogwood natural gas plant in Cass County; the BPU has the option to buy a larger share. This is costing the BPU ratepayers $75 million. Alvey said the good news was that the BPU was able to negotiate a favorable interest rate. The natural gas from Dogwood will be used at the Quindaro plant.
BPU’s second move will be to install anti-pollution equipment at its Nearman plant, which will continue to burn coal. Estimates are that could cost as much as $250 million. That will mean the BPU will have to issue more bonds, as it will take on more debt. A rate study will determine how much ratepayers will have to pay.
The politics of this was determined when President Barack Obama was elected to a second term as president. Liberal legislators could not get what they wanted from Congress, mostly because of a conservative-dominated U.S. House. However, the president and EPA officials are having the last word through very costly regulation, Alvey said.
This comes at a time when the demand for electricity here is down, mostly because of less industrial consumption, according to Alvey. However, there is a slight increase in residential service.
Alvey said he is concerned that EPA will have a negative effect on the economic recovery here in Wyandotte County and elsewhere.
“We (APPA) asked EPA why all this regulation was necessary when the United States produces only a very small amount of pollution,” Alvey said. “The only explanation EPA had was to set a good example.”
My view is that the United States should exert its influence with its trading partners, particularly China and India, to clean up their environments. American consumers are responsible for consuming many products and services from these countries. And a strong U.S. economy will mean that our country will be able to continue to make regular bond payments to China, which holds a substantial amount of our debt. We live in a world economy.
Murrel Bland is the former editor of The Wyandotte West and The Piper Press. He is executive director of Business West.