Shane Schoeller, Ed Emery press releases regarding Aquila power plant

Friday, May 2, 2008

Schoeller:

Jefferson City, MO- Some have inaccurately cast Missouri House Bill 2468 (recently passed as part of HB 2279), which I sponsored, as legislation designed to save Kansas City's Aquila, Inc. the embarrassment of dismantling its South Harper peaking facility in Cass County. Rather the purpose of this bill is to apply some common sense to what has become a three-year long legal battle and avoid the wasteful expenditure of $95 million to dismantle an electric generating facility at a time when the state needs more, not fewer, such facilities.

To highlight how little common sense has been applied to this situation, consider the fact that Aquila could be forced to dismantle the plant and then, doing exactly as the courts have prescribed, rebuild the same facility in exactly the same place. HB 2468 would avoid that ridiculous waste of $95 million.

Some also have said that this legislation would give the Missouri Public Service Commission significant additional power. Again, nothing could be further from the truth. This legislation is narrowly written and expires after one year, at which time the powers that it grants disappear as agreed upon by legislators on both sides of this issue.

Some people feel that Aquila built this facility without any legal authority. I disagree. Based on my review of the process that Aquila followed - a process that had been in place and used by all utilities in Missouri for 25 years- Aquila was following the same procedure used by utility companies across the state in building their power plants. In addition, two other states with very similar statutes that were challenged at the State Supreme Court level, ruled on the side of the utility companies in their final rulings. In any case, whether you agree that Aquila followed the proper legal process or not, I am convinced that the appropriate resolution of this situation is most certainly not the dismantling of the facil! ity.

In the hearing that HB 2468 received before the Special Committee on Utilities of the House of Representatives, Aquila executive Jon Empson apologized for Aquila's role in this situation. Aquila has subsequently reached agreement with Cass County under which Aquila would pay the county nearly $2,000,000 in legal fees and fines. Aquila also continues to work with the local citizens to addr ir concerns. To me, that represents a much more practical resolution to this issue than dismantlin th! e lant. That is why I have sponsored HB 2468 and support its enactment.

Emery:

"The legislative power shall be vested in a senate and house of representatives to be styled "The General Assembly of the State ofMissouri." (Article III Section 2 of the Missouri Constitution)

When the application of an existing law opposes sound reason, it is the duty of the Legislature to reconcile the statute in the best interest of the majority of the people. In a Republic (guaranteed to every state by Article IV, section 4 of the U.S. Constitution) the legislature writes the law; the courts issue opinions, and if an action is required, the executive branch is enlisted.

Occasionally, as is the case with the well publicized gas turbine peaking plant in Cass County, a court opinion conflicts with prior applications of a statute and creates a new standard by which to measure legality. In the case of the Cass Co. Aquila Plant, the court ruling created an impasse that could cost as much as $100 million and leave the same plant in the same place providing the same service to the same people. When my attention was first drawn to this situation on March 25th it looked like a perfect Catch-22.

Consultation with an attorney confirmed that the only reasonable alternative to removing and rebuilding the power plant was legislation, especially given that a hearing before the Missouri Supreme Court was considered unlikely. The 2008 filing deadline for legislation was April 2, so language had to be drafted, proofed, cosponsors enlisted, and a bill filed with just four remaining legislative days. Concerns with the bill as filed were remedied in the House Committee Substitute that was voted out of the Utilities Committee and is now on the House calendar.

Once a court had offered its opinion, Aquila estimated an 18 month delay if they waited for the court's final resolution before beginning construction. That delay, combined with the City of Peculiar's promise to annex, the Public Service Commission (PSC) ' s assertion that their approval was sufficient, and the over 20 years of PSC history on similar but smaller facilities may have convinced Aquila to proceed in hopes of a favorable appellate court ruling. There was also pressure to move forward in order to avoid $11-15 million per year increased electricity costs to Aquila' s 300,000 customers if power had to be purchased rather than generated.

The actual delay was three years before the Appellate Court's ruling. The legal argument before the court was between 393.1 70.3 RSMo, relating to construction of electric plants, and 393.140 RSMo, relating to powers of the Missouri Public Service Commission. The court's opinion was that Section 393.1 70.3 prevails, and that "the PSC exceeded its statutory mandate by issuing the CCNs..." (Certificate of Convenience and Necessity)

I do not believe it to be in the best interest of Missourians to tear down the $140 million dollar power plant at a minimum cost of $20 million and rebuild it at a cost of up to $80 million. However, without a change in the statutes, that is the effect of the Western Appellate Court's March 2008 opinion. As a citizen, there is nothing I can do to resolve this conflict; but as a legislator, I can sponsor or co-sponsor legislation to provide a statutory path to maintain the plant and the benefits it provides. That is what I have chosen to do, and I am still convinced it is in the best interest of my constituents and the State of Missouri.

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