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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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

SENATE BILL 257 AN IMPROVED SITING BILL: FURTHER WORK NEEDED  Posted: March 5, 2002

Kentucky Resources Council, Inc.

Post Office Box 1070

Frankfort, Kentucky 40602

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

e-mail fitzKRC@aol.com

March 4, 2002

SENATE BILL 257 AN IMPROVED SITING BILL: FURTHER WORK NEEDED

SB 257, introduced by Senate Agriculture and Natural Resources Committee chair Ernie Harris, is an improvement over the Patton Administration siting bill, HB 540 in several areas. SB 257 includes these changes from HB 540:

Provides permanent public membership on the Board in additional to a member of the public that will be appointed by the mayor or county-judge;

Requires consideration of the impacts of special wastes, a category into which many utility wastes fall;

Removes special exemptions from setbacks that had been carved out in HB 540 to favor one company;

Requires consideration of the applicant's financial, technical and managerial capability by the siting board for applicants and transferees;

Clarifies that coal-fired merchant plants must comply with the act;

Narrows the construction test to eliminate the possibility that ceremonial dirt turning could be considered construction;

Provides for automatic hearings in counties with no zoning;

Removes regulated utility plants from the siting board while giving meaning to the PSC review of "environmental compatibility,"

KRC recommends that these changes be made to SB 257 in order to make it a comprehensive siting bill that provides thorough review of all merchant plants and improves environmental compatibility review for regulated units.

1. Clarify applicability to pending power plants by making the bill applicable to any electrical generating facility with an aggregate capacity of over 25 mW that has not received all state, federal and local approvals and permits and has not begun a continuous course of construction under contract as of the effective date of the Act.

This would include all pending plants that were are not fully permitted, and avoids efforts to skirt the law by engaging in construction between now and the effective date of the act, because the moratorium would extend until the effective date of the Act.

2. Clarify language with specific reference to KRS 100.324 to assure that all merchant plants (whether proposed by a regulated company, municipality outside of the municipality's home county, or other company) is subject to and must comply with zoning and planning.

For regulated units, clarify that where there is zoning and planning a review and recommendation from zoning and planning is given as to compatibility, but not approval or disapproval by that planning and zoning body.

3. Subject the siting of unregulated transmission lines to the same approval criteria as the plants themselves. Where the unregulated transmission line is to support a particular project, the impacts of the transmission lines should be considered as part of that project. Where the transmission line is an unregulated "Transco" unrelated to a particular project, it should undergo as rigorous a review. Under both HB 540 and SB 257, the approval criteria are narrower than for merchant plants, focusing only on scenic and environmental "assets." It should also be clarified that merchant transmission lines and transcos are subject to local zoning and planning as well.

4. Strengthen the environmental review criteria for "environmental compatibility" in Section 11 to require submittal to the Cabinet of the equivalent of an Environmental Impact Statement (as plants are currently required when seeking DOE or RUS money) and that finding of environmental compatibility depend on the Cabinet finding that all identified impacts have been adequately mitigated at the plant's property boundary. Don't rely on arbitrary setbacks and use of other people's property to create buffer for plants.

That environmental impact statement analysis should require applicant to include alternatives analysis demonstrating co-location at or near existing sites is infeasible and that no other technologies and investments (including demand-side controls) would satisfy the project purposes with less impact;

5. Require that applicant demonstrate as part of the Siting Board application that it possesses or has the financial capacity to obtain the necessary allowances for NOx and SOx.

6. Require 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.

7. Require that merchant plants conduct noise modeling to demonstrate that the noise levels, at the property boundary, do not exceed appropriate peak and average levels.

8. Require as part of the cumulative impact assessment that 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.

The potential exists for minor sources to have a significant cumulative impact on air quality. This provision would capture those effects for review, avoiding companies accepting individual caps but building multiple units in order to avoid thorough review and limits.

9. Require that BACT requirements (Best Available Control Technology) for NOx (Nitrogen oxides) be met by all new minor and major electricity generation sources.

The potential exists for units to accept overall annual caps as minor sources and yet to emit the total annual amount in the three-month peak ozone season. BACT controls would remove the incentive from skirting regulatory limits.

10. Public notice and hearings on the permits should be provided in all cases.

11. Sunset the Siting Board approval so that if a continuous program of facility construction has not begun in earnest within eighteen months after siting approval, the certificate will lapse.

In order to assure that siting approvals and conditions remain current, a sunset provision is appropriate. Also, a unit holding a siting board and permit approvals becomes included in the baseline, thus potentially restricting other more viable projects. The air permit lapses in an 18-month period, and this provision would track that time frame.

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