Risky Business: Coal to Cost Kansas

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"Risky Business: Coal to Cost Kansas"

Innovest, a firm that researches investment and risks, released a report today that concludes that the proposed expansion of the Holcomb coal-fired power plant in western Kansas is not a financially sound or well thought-out decision.

From their press release (emphasis added):

Innovest examined the economics of the transaction and determined that under the most plausible regulatory scenarios the decision to build new coal generating capacity will put Sunflower Electric’s ratepayers — who in this particular case are the actual owners — at significant risk. The report concludes that Sunflower’s management has not adequately addressed the competitive and financial risks associated with climate change in deciding to pursue the expansion of its Holcomb Station power plant.

BUT, Secretary Bremby’s decision DOES adequately address the risks associated with the expansion in the context of climate change and its policy implications. As does Wall Street’s latest verdict in February, when a few of the country’s major investment banks announced that they will be making their financial backing decisions in the context of global warming legislation.

With Innovest’s conclusion that the ratepayers themselves are at ‘significant risk,’ I’m just not sure how any of the arguments for these coal plants (like energy prices) hold up any longer. Hopefully Innovest has a memo to send to KS legislators before the vote to over-ride Sebelius’ veto.

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