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In 2004 KCPL announced a plan to build a new power plant, add emission controls at two existing plants (work is underway), add wind generating capacity (100 mw is now on-line), upgrade its transmission and distribution system, and implement additional energy efficiency programs (underway).
In order to avoid a lengthy "contested case" before the Missouri Public Service Commission to get permission to build the plant and raise rates, KCPL conjured up an "experimental regulatory plan" under which it would co-convene a series of "workshop" meetings with parties it would customarily expect to face in a contested proceeding -- plus anybody else who wanted to be involved -- to get consensus. CCPC and Sierra Club participated as two of the other parties. KCPL ran the workshops. At the end, KCPL wrote a "stipulation and agreement" which said, in essence, "We customary adversaries agree with KCPL that a new power plant is needed." Then KCPL had private talks with said customary adversaries to get their consent on the stipulation and agreement. (Whether the company may have offered special concessions in return for signing is open to speculation.) The Sierra Club and CCPC did not sign.
The workshop proceeding was closed. Then KCPL applied for a new proceeding before the PSC to get formal approval for the power plant, and presented the stipulation and agreement as evidence that the new plant was needed. The PSC took that, along with our arguments (including testimony by Ned Ford on the potential of efficiency measures), and gave approval.
Today the Appeals Court ruled that KCPL could not base its request for approval of the power plant on a stipulation and agreement -- that the PSC couldn't initiate a case that's supposed to be "contested" by accepting a stipulation and agreement.
KCPL's spokesman claims the decision means only that the PSC is faulted for the way it reached its decision. But now, presumably, KCPL will have to go through a formal contested case -- and that case will be informed by two additional years of growing evidence about the costs and risks associated with coal, and the benefits of DSM.
No doubt KCPL will appeal the decision. If they lose again, they'll be just that much farther behind their original desired timetable (fourth quarter 2004) for getting approval to build the plant. The plant is now in the early stages of construction, but I'd bet some KCPL executives are not sleeping well tonight.
Posted on Tue, Feb. 27, 2007
By DAVID TWIDDY
Associated Press
Appeals Court Overturns State Approval of KCP&L Plant
KANSAS CITY, Mo. - An appeals court on Tuesday overturned the state's 2005 approval of Kansas City Power & Light Co.'s plan to build a second coal-fired plant in northwest Missouri .
The Missouri Court of Appeals for the Western District ruled that the Public Service Commission failed to follow state law for evaluating new power plants and didn't have jurisdiction to approve KCP&L's request.
It's unknown whether the decision will force the utility to halt construction of the plant being built 25 miles northwest of Kansas City .
Tom Robinson, a spokesman for KCP&L's parent company, Great Plains Energy Inc., said the ruling only faulted how the commission approved the company's $1.3 billion long-range regulatory plan, which includes the Iatan 2 plant, building wind farms in Kansas and upgrading pollution controls at existing plants.
"It does not address the merits of the components of our comprehensive energy plan," Robinson said.
But the company's critics, who say the coal-fired plant will worsen pollution, said the decision is a major setback for KCP&L.
"This plant is dinosaur technology," said Henry Robertson of Great Rivers Environmental Law Center , which represented the Sierra Club and Concerned Citizens of Platte County in challenging the commission's decision. "KCPL may have to rethink whether they're going to continue building it."
KCP&L already operates a coal-fired plant at the site near Weston, called Iatan 1.
The company developed its long-range plan in 2004 after a series of commission-sponsored meetings to review the company's future power needs, costs and environmental requirements. At the end of the meetings, state officials, the company and a number its largest customers presented the commission with the long-range plan, including Iatan 2 and restrictions on when the company could raise electric rates.
In typical cases, the appeals court noted, a utility would propose building the plant or raising rates and then later work out a compromise with its customers and regulators.
KCP&L said it wanted to avoid a long, drawn-out approval process that could have affected its investment rating.
Commissioners approved the compromise on July 28, 2005.
Opponents filed suit, saying commissioners essentially conducted the case backward and hamstrung public comment on the plan, an argument the three-judge appellate panel supported.
"The procedures set forth in the statutes provide the mechanism for prosecuting substantive rights and must be followed," the court said, adding that the commission lacked authority to waive its rules.
Commission spokesman Gregg Ochoa said the commission had no comment.
"I don't know if the commissioners have even seen it," Ochoa said.
The plant's critics welcomed the decision.
"We are ecstatic, today's decision is a victory for open government, ratepayers and the environment," said Melissa Hope of the Missouri Sierra Club. "KCP&L tried to do something outside of the public process to gain approval to build an expensive and dirty coal-burning power plant."
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