September 2, 2005
‘The more we bake the higher their take!’
Hummm, now sing along folks — “The more we fry, the higher they fly!”
Both of these little ditties have been rolling around in my head ever since I read the July/August Issue of the Coal Leader. This tabloid calls itself “Coal’s National Newspaper.” Judging from the content, it focuses on the companies that dig the mountains of coal in this country, almost all of which is used to generate electricity. Coal burning is a major source of carbon dioxide, a greenhouse gas that scientists agree is making our planet hotter, among other things.
The July/August issue includes an interview with CEO Steven Leer of Arch Coal, the nation’s second largest coal producer. Leer was bemoaning the fact that weather related events had disrupted the unit coal trains that constantly ply their way from the vast Wyoming coalfields to coal-fired power plants throughout the West and Midwest. He said it was expected to significantly reduce shipping capacity through the end of the year. As a result, utility companies, including Westar and KCP&L, are trying to husband their coal piles.
What caught my eye, though, was the cheery quote at the end of the article: “Despite ongoing rail challenges, we are more confident than ever about the long-term prospects for our company. A growing economy, high prices for competing fuels and hotter-than-normal summer temperatures should translate into very robust demand in the future.”
What! Is he some kind of visionary meteorologist who can predict how hot future summers are going to be? Or does he believe the atmospheric scientists who say our planet is warming from the very kind of activity that supports his six-or seven-figure income?
Now if you go to the investor relations section on KCP&L’s website (www.greatplainsenergy.com), you find the same kind of thinking. In October 2004, Great Plains Energy (mostly KCP&L) reported that third quarter, 2004 earnings declined primarily because of “unfavorable weather.” Earnings were impacted by the “coolest summer in over a decade.”
Unfavorable for whom? I remember the cool summer evenings. My veggie garden thrived, and I wore the same tree-hugger T-shirt for days.
I first noticed KCP&L’s fancy for hot weather when boning up for the evidentiary hearings conducted by the Kansas Corporation Commission to assess KCP&L’s plan for their huge new coal plant near Weston, Iatan 2. On Aug. 22, 2003, KCP&L had issued a special press release announcing that customers had set a record for electricity demand the previous day when the temperature maxed out at 105 degrees downtown.
I already had their peak demand number for 2003 and I surfed the web to find out what KCP&L’s peak demand had been in 2004 so I could calculate their load trend. It was nowhere to be found. They did talk about the cool summer of 2004, but they didn’t cite that year’s peak demand. We had to get it out of them during cross-examination.
You’d never know about this love affair with heat from listening to KCP&L’s slick PR. They are planning to spend $53 million on a demand management pilot program over five years. That’s a program to encourage customers to conserve power. This is certainly a step in the right direction. But based on what they say to investors, one does tend to get a bit skeptical. By combing through KCP&L’s testimony, for example, we found out that they didn’t deduct from their load forecast the 170 MW of capacity they would save from this program.
KCP&L has received approval from, both the Missouri Public Service Commission and the Kansas Corporation Commission to proceed with their plan. However, it’s not a done deal yet. They still have to get their air permit for Iatan 2, and litigation by environmental groups is likely. I’ll be covering these and other elements of the coal plant story in future articles.
Say, how about this? “The more we sweat, the richer they get!” Now I have this mental image of a garden party where coal lovers dance slowly to the hum of an air conditioner.
Craig Volland is chair of the Air Quality Committee of the Kansas Chapter of the Sierra Club.
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