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Posted on Thu, Mar. 08, 2007
By MARK WIEBE and KAREN DILLON
The Kansas City Star
BPU Power Plant - May Not Happen
BPU looks at effects of report
Leaked document may lead to big costs and delay in building plant, it says
A local utility may have to delay construction of a power plant after a leaked confidential document identified possible violations of federal clean-air laws, utility officials said Wednesday.
Kansas City, Kan., Board of Public Utilities officials also acknowledged in an interview that the document's release had prompted them to approach the Environmental Protection Agency, something they did not do when the document was prepared in 2004.
The BPU document, sent anonymously to The Kansas City Star last week, identifies at least 15 upgrades at power plants that may have violated the law. The document, called a "liability analysis," said the BPU could face thousands of dollars in fines.
It is also possible the utility will have to spend millions in mandated upgrades, including additional anti-pollution equipment at the Nearman plant, general manager Don Gray said Wednesday.
"It's going to really put a strain on finding funding for everything," he said.
Depending on the size of the financial crunch, the BPU could be forced to delay plans to build a $600 million to $700 million power plant by 2012, officials said.
"It could put the power plant on hold financially," Gray said.
Although BPU officials initially fought the release of the documents, the Missouri Court of Appeals cleared the way Tuesday for The Star to print a report on the confidential report.
Gray, human-resources director Marc Conklin and two officials with the BPU's electric division discussed the liability analysis Wednesday at the utility's headquarters in downtown Kansas City, Kan.
BPU launched the analysis after the EPA began a crackdown in the late 1990s to more strictly enforce the federal Clean Air Act, which includes regulations to reduce pollutants emitted from coal-fired power plants.
On Wednesday, utility officials explained that the BPU sought the analysis in 2004 after hearing that the EPA had asked four other utilities in the region for records on power plant upgrades. Soon after hearing about the requests, BPU officials also heard the head of the EPA's air-quality section say at a conference that the requests were just the "first round."
The liability analysis, Conklin said, was an attempt to gather the documents the BPU would need in the event of EPA action. The analysis examined 73 projects for possible violations and the penalties the BPU could face.
When utilities upgrade their plants, the government requires them to evaluate air emissions before and after construction to determine whether emissions increased, which is part of a program called "New Source Review."
The analysis found that most of the BPU projects could be defended for not having a New Source Review permit but that 15 projects were questionable and that 15 were probably not defensible.
It pointed out that the utility had the choice of approaching the EPA to reach a settlement or waiting for the EPA to initiate action.
"It's basically saying, in a worst-case scenario, here's what the EPA may tell you," Conklin said.
Conklin said the BPU did not approach the EPA at the time because the utility eventually decided it would not receive a request for documents from the EPA.
Since the document was leaked last week, Conklin said, the BPU's attorneys from Stinson Morrison Hecker have been talking with EPA officials. A meeting is imminent, Conklin said.
The EPA's Region 7 headquarters in Kansas City, Kan., issued a brief statement Wednesday that did not address the BPU directly but said that it "investigates all evidence of noncompliance."
BPU board members were never asked to act on it. In fact, at least three have said they never even heard about it, including board president Mary Gonzales, a board member for about six years.
On Wednesday, board member John Pettey said no one from the BPU administration had ever shown him the document or discussed it with him. "I've been a board member for 12 years and I've never seen anything at all about that," he said.
Conklin, however, insisted otherwise.
"I can tell you the board was made aware of the issue," he said.
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To reach Mark Wiebe, call (816) 234-5995 or send e-mail to mwiebe@kcstar.com. To reach Karen Dillon, call (816) 234-4430 or send e-mail to kdillon@kcstar.com.
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