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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

Support a Strong Power Plant Siting Bill  Posted: February 27, 2002
Letters in support of a strong siting bill should be faxed at 502-564-6543 to your state senator and to each member of the Senate Agriculture and Natural Resources Committee, Senators Ernie Harris, Joey Pendleton, Vernie McGaha, Dan Kelly, Robert Leeper, Virgil Moore, Ernesto Scorsone, Tim Shaughnessey, Elizabeth Tori and Ed Worley. A message can be left for each at 1-800-372-7181. Click here for more instructions.

Kentucky Resources Council, Inc.

Post Office Box 1070

Frankfort, Kentucky 40602

(502) 875-2428 phone (502) 875-2845 fax

e-mail fitzKRC@aol.com

February 27, 2002

WHAT IS NEEDED TO CONTROL MERCHANT POWER PLANT SITING:

House Bill 540 too little, and may be too late, unless it is made stronger1

Why Is A Siting Bill Needed?

The decision to site an electricity generating facility presents potentially significant adverse environmental consequences that, left unchecked, may interfere with other land uses, economic development, and attainment and maintenance of air and water quality.

Generating power, particularly where fossil fuels (coal/oil/gas) are combusted or thermally processed to make electricity, is a significant capital investment for the investors, ratepayers or public entities proposing the plant.

So too, the siting, construction, operation, maintenance and closure of the power plant represents a significant commitment of community and environmental quality and resources and is a matter of great interest and legitimate concern for the public, including those in the "host" neighborhood, community, city, county, state and region. The scope and severity of impacts of a facility varies with the size of the plant, level of technological controls, fuel composition and fuel configuration, and other facility-specific issues, but there are common issues of concern that must be addressed "up front": air pollution, waste disposal, water use and water discharge, groundwater contamination, transportation, and land use compatibility.

Does Kentucky Need More Power Plants and Transmission Lines?

No. Kentucky has adequate generating capacity and an adequate process for planning to meet future needs of Kentuckians for power. Our transmission capacity is adequate to serve our "native load." While there is nothing wrong with manufacturing a product in Kentucky for export, electricity is not merely another "commodity." Each of these "merchant" power plants represents a long-term commitment that has environmental and community consequences, and those consequences must be reviewed in a coherent manner and must be mitigated to the extent possible in order to assure that the public interest is protected. In the words of one power industry observer. "these power plants do not sit lightly on the landscape."

Isn't compliance with permit limits sufficient? Do we need a siting bill?

There are a number of concerns at a local, regional and state level that the state permits do not limit or address. A siting bill is needed to allow a more comprehensive review of all impacts of a facility and to assure that appropriate conditions are imposed where needed, even where the state has no current limit, such as noise, lighting, transportation conflicts, groundwater protection, and compatibility with surrounding and nearby land uses. Additionally, for counties where there is zoning and planning, the law must clarify that merchant plants are subject to local zoning approval. For those counties without comprehensive planning, the siting process provides a mechanism for addressing those land use compatibility issues.

Do new regulated power plants proposed by regulated utilities need to undergo a second siting review process?

No. For new regulated units that are proposed by regulated utilities, there is already process by which the utility must justify the need for the facility to the Public Service Commission and must demonstrate that it is the least cost alternative. What is needed for new regulated utility plants is to give meaning to the determination of "environmental compatibility." The PSC review process includes a recommendation of "environmental compatibility" by the Natural Resources & Environmental Protection Cabinet, yet that review lacks meaningful standards and has been a "rubber stamp" of facilities provided that they will meet permit limits under air, waste and water laws.

Merchant units, that will operate at the wholesale level and sell power at market rates, must be reviewed for siting whether proposed by a co-operative, municipality or private investor-owned utility or private corporation.

Does HB 540 adequately protect communities and the state from adverse effects of merchant power plant siting and operation?

No. The bill, as passed by the House, is too underinclusive, underprotective and too vague to provide meaningful protection to Kentuckians against unnecessary and avoidable impacts of these new power plants.

* HB 540 lacks any clear statement of scope, and appears to exempt facilities that have "commenced construction", even if they do not have all permits. By turning a ceremonial spade of dirt before July 15, 2002, when the law takes effect, every merchant plant can exempt itself.

* Solution? Clean up the language in Section 3(1) to include all new power plants unless they have been fully permitted at the federal, state and local government level and have bona fide construction underway. For those plant holding all permits and under construction, a siting review should still be required to determine if impacts are adequately mitigated and reasonable mitigation measures should be required consistent with the status of the facility (i.e. relocation and redesign would not be reasonable but yet many low-cost mitigation measures such as noise controls could be incorporated in many cases).

* HB 540 relies on inadequate and arbitrary setbacks instead of comprehensive assessment of impacts and mitigation at the property line. Why is one residence located near a proposed power plant only entitled to a 500-foot setback, but if that home has 4 neighbors, the setback increases six-fold? The effect of using exclusionary setbacks that are measured not at the project property line but instead to features on other people's property, is a reverse-zoning of those other lands, and a targeting of rural counties with no zoning or planning as the site for new plants.

Solution? Require sufficient assessment of each facility's impacts to determine what is needed to adequately mitigate its noise, lighting, dust, emissions, and other environmental impacts, and assure compatibility at the boundary of the plant property, through use of in-plant design, construction, location, and mitigation measures to lessen impacts in order to avoid nuisance impacts and environmental pollution. Minimum setbacks maybe helpful as a default but must be appropriately set and capable of modification up or down as needed to fully mitigate impacts.

* The siting review board lacks adequate public involvement. The 7-member siting board includes two "ad-hoc" members that will change with each power plant - one being the planning commission head or county judge/mayor; the second, an individual appointed by the Governor.

Solution: Effective public involvement requires permanent membership by the public. The Board should be enlarged to include a seat for the Environmental Quality Commission designee, a designee from the Attorney General's office, and an appointee designated from a list prepared by non-profit organizations involved in environmental protection and land use planning.

Longer term, the creation of an office of community and consumer advocacy that would participate as a watchdog in utility-related matters on behalf of non-commercial and non-industrial consumers and the public, should be established.

* The siting process should not be "gamed" to favor certain types of companies or certain projects. As written, the bill has been crafted to avoid interfering with certain projects. Setbacks for "cemeteries" interfered with one coal project and was eliminated, another special legislative clause was crafted in Section 4(e) to allow one merchant company to use property that otherwise would fall within the law's meager setback prohibitions. A House Floor amendment could be read to mandate, notwithstanding the siting process, that the Siting Board approve any clean-coal technology, by demanding that the siting board "shall" give such projects "favorable consideration."

Solution: Eliminate provisions favoring or exempting certain types of facilities in order to make the process equally applicable. Clarify how the various factors for approval of power plants are to be weighted.

* The standards for approval and information requested are inadequate. The level of review of the impacts of the projects has been weakened from the original committee substitute when they needed strengthening instead.

Solution: Strengthen the standards to assure a sound decision based on full disclosure and analysis, comparable to that already done by co-ops for their plants under the National Environmental Policy Act, to include:

* analysis of all impacts on air, land, water resources, compatibility with land uses and local ordinances governing pollution and nuisances, and an integrated environmental and public health risk assessment. The Assessment must evaluate impacts on property values, on the pattern and types of development of surrounding and nearby properties, and the ability of the host community to provide public services and still protect fully the health and welfare of the public and the environment.

Electric Cooperatives are already required by the Rural Utilities Service to undergo an environmental analysis under the National Environmental Policy Act, considering alternatives and impacts of the proposed action. Facilities utilizing federal monies likewise undergo NEPA review. The level of analysis and assessment of reasonable alternatives used to support an environmental impact statement should support the "environmental compatibility" review and apply evenly across the board among regulated and merchant units.

The standards for review and approval of a site are the heart of the bill. Approval of a site should be contingent on finding, and imposition of enforceable conditions to assure:

- that the environmental and community impacts of the proposed facility have been mitigated so as to prevent adverse effects on the public health, safety and the environment. (HB 540 requires only "reasonable" levels of mitigation and allows offsets instead of mitigation).

- that co-location at an existing facility is infeasible;

- that all federal, state and local laws will be followed;

- that the individual and cumulative effects of the proposed facility have been mitigated to a level necessary to avoid adverse effects on the health and welfare of the public and the environment;

- that the applicant possesses the necessary allowances for emissions of oxides of nitrogen and sulfur;

- that the applicant possesses the financial, technical and managerial capacity to construct and operate the facility;

- that no other feasible alternatives exist, including other locations, technologies and investments (including demand-side controls) that would satisfy the project purposes with less impact;

- That if a continuous program of facility construction has not begun in earnest within two years after siting approval, the certificate will lapse.

- and that for any emissions of criteria or toxic air pollutants, the facility has fully offset new emissions of ozone-precursor compounds and air toxics by enforceable credits obtained from existing sources.

- that noise modeling has been conducted to demonstrate that the noise levels, at the property boundary, do not exceed appropriate peak and average levels.

How Should We Address The Specific Issues Related To Gas-Fired "Peaking" Plants?

There are several issues presented by the siting of gas-fired peaking plants that should and can be controlled through clear regulatory and legislative policy. In December, 2000, the Illinois Pollution Control Board issued recommendations concerning gas-fired, peak-load electrical power generating facilities in response to a request by Governor Ryan. This discussion and recommendations track those made by the IPCB.

First, these plants operate, by intent and design, during peak demand times, emitting the total annual permitted amount of pollutants in a short period of time during periods of peak demand. Those peak periods in summer often coincide with periods of ozone concern, when the air quality is most vulnerable to any additional contribution of NOx, a precursor of ozone formation.

The units are often clustered, and located near populated areas. While individually the units may not exceed annual emissions concentrations sufficient to be considered major sources, they may pose significant short-term and cumulative impacts on air quality. The units may avoid application of available control technologies that could greatly reduce NOx emissions by being considered individually "minor" sources.

Beyond air impacts, peaker plants may pose, as the Illinois report reflected, a "greater threat of noise pollution than many other types of state-regulated facilities." Noise modeling is required in Illinois to address these jet-turbine peaking units.

In the area of water use, combined cycle plants that utilize steam pressure to supplement the hot-compressed air generation of electricity from simple cycle plants, may utilize 5-20 million gallons per day of water, in contrast with the .07-2 mgd for simple cycle plants.

Solution? Direct the Natural Resources Cabinet to require dispersion modeling be conducted by all proposed electrical generation units, including so-called "minor" sources, using conservative modeling assumptions and metrological conditions, and including emissions from other proposed and existing major sources and peaking units, and impose BACT requirements (Best Available Control Technology) for NOx (Nitrogen oxides) controls from minor and major electricity generation sources. Public notice and hearings on the permits should be provided in all cases.

Analysis developed by Tom FitzGerald, Director, KRC.



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