State Energy Resources Coordination Council

May 7, 2003

Curtis Building, Topeka, Kansas

The meeting was convened at 10:17 a.m. by Council Chair, Lee Allison.

Joe Pajor introduced himself to the group as representing Colin Hansen, and Larry Holloway was present representing Brian Moline.

Allison:  Need to ask this group if those who are representing a member of the Council have voting rights? Dave Phelps commented that he was OK with them having voting rights and Alex Silver said he had no problem with them having voting rights. A unanimous voice vote by the Council was to make it SERCC policy that official representatives of Council members have the same privileges as members.

Present:  Lee Allison, Liz Brosius, David Dayvault, Spencer Depew, Lee Gerhard, Larry Holloway, Donna Johnson, Greg Krissek, Joe Pajor, David Phelps, Jim Ploger, Don Schnacke, Alex Silver, Bruce Snead, David Springe, Michael Volker, and Kyle Wetzel.

Allison:  Lee stated that this group had been appointed by Governor Graves, that Governor Sebelius has not made reappointments, but the information from the Governor's office is that all current members are to continue. Lee asked the members to go around the room and introduce themselves, and tell what organization or company they are with.

Joe Pajor, representing Colin Hansen who is with the Kansas Municipal Utilities. Greg Krissek representing Jeff Roskam who is with ICM, Inc..

Allison:  We have several items on the agenda Ė

Recommend putting forward an aggressive agenda for the 2004 energy plan.  The Council should take out the restrictions given to us last year for the energy plan, and not worry about the budget implications of our recommendations.

By our October meeting we should examine priority issues.

Any additions to the agenda?

The notes from the February 28, 2003 meeting were distributed.

Allison:  We had three pieces of legislative action related to energy this year in the legislature.

Bruce Snead:  Bruce gave a brief update on HB 2131 (thermal efficiency standards).  The bill was signed by Governor Sebelius, and is the first in the country to use updated energy conservation codes for commercial and industry standards, a home energy rating score, and improving accessibility to energy information to homebuyers in the purchase process.  This is a significant achievement.

Allison:  We applaud your personal efforts on this bill.  

Snead:  We had some opportune moments.

Ploger:  There was a great crowd for the bill signing.  A proposal was sent on Monday to DOE for $150K from their special projects area to do training on efficiency standards.  We wonít hear anything about the proposal until August.

Allison:  Another piece of legislation was HB 2282 (relieve companies of punitive liabilities).  This bill will be carried over.  We need to do some language changes before the next legislative session.

Brosius:  HCR 5015 Ė there wasnít much opposition but it stayed in committee.

Brosius:  We have been working on the Kansas Energy Abstract, and have a draft copy.  Michael Volker will be a reviewer.  I hope to send it to press very soon, we donít have as much data on some topics as we have on others.

Allison:  We have pulled together data, it will be an official Energy Council publication published by KGS.  The Energy plan is an Energy Council document.  

Depew:  What is the timetable for the abstract?

Brosius:  Whenever we stop making changes and corrections.  I'm thinking that Mike may be able to review it within a month.

Allison:  The duty of the Council was to set up a transmission task force.  Kyle Wetzel has been making some recommendations to tie in existing activities and roll them into the Council.

Volker:  I have talked with Barry Hart which is how this was put in Kyleís court.  We talked about issues with transmission.  The biggest question is what is already going on in the state, there are a number of efforts, also had to do with what Kyle has going on, and the other issue is what is going to happen at the federal level.  Barry is finding out that information for us.  Kyle has a better idea of what has been accomplished so far with the group.

Wetzel:  We took language out of the plan; the biggest issue is electrical isolation of eastern to western Kansas.  The capacity is low, and it will take $300 M to upgrade.  We keep getting questions on wind capacity in Kansas, and canít answer that.  Kyle serves as chair of the Kansas Renewable Energy Working Group Transmission Committee, it was formed in July of 2002.  We have asked a number of people to serve on the Task force.  Is there anyone else that should be on the list?  We had a question about the chair being a SERCC member, and about the scope of activities.  Is there a deadline to come forward with recommendations?

Holloway:  If we call this the SERCC Transmission Task Force, that works in this state but SERCC means something else outside of the state.

Springe:  A component of the bill had KCC required to do reports.

Holloway:  That part of the bill did not go forward.

Depew:  In the transmission lines you have shown in your presentation, are these single owner lines?  Whose lines are they?

Wetzel:  These lines are owned by several different owners.  The other catch is that where the existing 345 line is in Hamilton county, it is going to run into Colorado, near Lamar.  That will constrain the amount of power that can be transmitted.  The lines donít end at the state line.

Allison:  Michael Volker is serving as acting chair for Barry Hart.  Is the utilities committee recommending specific tasks or timelines for transmission issues?

Volker:  No, the issue is moving power, there are technical issues associated with this.  We are going forward and can come up with things to look at, this group could have some influence at the federal level, whatever comes out of congress is not going to be like standard marketing.

Holloway:  There are some state models to look at like Michigan and Wisconsin.

Volker:  As an off shoot of the utilities committee, they can recommend things to us, we would be in agreement.

Allison:  I would like to suggest that what we have seen here, and what we agreed to, is the development of a transmission task force.  I will now open it up for discussion.  Who should be chair?  It doesn't have to have a council member as chair.  I would like to invite Carl Holmes and Tom Sloan to serve in an ex-officio role.  What does the council need to do to help influence at the federal level?  What does Kansas need?  This will be an official state sanctioned group.  They have a broad purview to look at electrical transmission in Kansas.

Brosius:  The transmission task force should consider having something by the end of the year to be used as text for the 2004 Energy Plan.

Allison:  The text should describe the problem.

Wetzel:  I have informed those folks that the Council would need recommendations for the October meeting, so the task force would need by September.

Allison:  I hear a uniform consent to move forward.  We will work with Kyle Wetzel and Michael Volker to flesh out, name a chair, and develop the mission.

Allison:  We have had a change in the SERCC philosophy Ė at our last meeting we had good discussion that if we want Kansas to be self sufficient in energy, it may make the cost to customers too high, would be self defeating. It is more appropriate to make sure that Kansans have affordable energy.  The Council needs to change the wording of the mission statement Ė ."It is the goal of SERCC to help insure that Kansans have low cost, reliable, and sustainable energy, produced in-state to the fullest extent possible."

Allison:  I would like to have a formal vote, we need a motion.

Volker:  I make a motion to adopt the language of the mission statement as just read by Lee Allison.

David Dayvault and David Phelps seconded the motion.

Pajor:  You have made a point that might conflict with each other - reliable may need to come before low-cost.

Allison:  We may want to avoid a hard priority right now, priorities may change from time to time.  

Pajor:  Who would vote for the opposite of the wording, high-cost, unreliable, non-sustainable?

Allison:  It is not in the Executive Order.  We put it in.  We are not just looking at self-sufficiency, we are adding other factors that have as much or more priority.

Springe:  We donít have the power for making policy, I view this committee as a vehicle to provide rationality for state energy capacity goal.

Allison:  We need to look again at the Executive Order.

Pajor:  We have a new governor, maybe we could change the Executive Order.

Volker:  That is why we want to have a general mission statement.

Silver:  I acknowledge the concern for environmental responsibility lacking in the current mission statement.  Isn't environmental responsibility included by default?

Volker:  It took the word sustainable to be included in the mission statement to make it be.

Springe:  Should leave the statement broad like that.

Allison:  The motion passed with no opposition.

Allison:  I would like to talk about plans for public comment on the Energy Plan.   Should we open the plan up to public comment?  I suggest that we go forward with a written form to ask for comment.  It could be distributed to entities that have knowledge in energy, but make it available if the public wants to make comments.  We are reaching out.  What about a deadline for the 2004 plan, if we put it out for public comment, it is up to staff to prepare press releases, the written comments, compile the comments and bring forward to the October meeting.  The comments would need to be summarized for the Council to look at to see if there are things to add or modify in the plan.  We need to make sure we are reaching out, asking for public comment, but need to limit the impact on our time.  

Brosius:  We had originally discussed having public input before the July meeting to consider in the list of priorities.

Allison:  Could we do something in the short term to submit by the July meeting?  It would minimize the impact on Council members and our time, gives us a chance to reach out to energy communities.

Snead:  When you say "written" do you mean electronic?

Allison:  Yes, I do not mean to have public hearings, where people would come forward and have five minutes to argue.  I don't hear anyone who opposes the written comment.

We could structure the announcement to say, "Please provide comment on the proposed 2004 state energy plan," and we could reference the online version of the 2003 plan.  We will go forward.

Strategy Ė are there any questions on the timeline and strategy?  

After lunch we will be asking the sector committees to come forward with what would be the greatest impact on the energy plan in the state.

One of the study items is net metering and some other factors.  Donna Johnson and Michael Volker will make a presentation on these issues.

Johnson:  In this presentation, I will be giving basic definitions of net metering.

Allison:  What does PURPA mean?

Volker:  Public Utility Regulatory Policy Act.  Net metering is more of a political issue, more than a renewable issue.

Johnson:  These are not huge issues, promoting small systems, small system renewables is expensive power.

Allison:  Avoided costs, wholesale costs?

Volker:  1.5 avoided costs, I will cover that in my presentation.   Kansas energy law, avoided energy cost, does not include transmission.

Pajor:  If this hasnít helped, since 1983, why do you want to do net metering?

Johnson:  It does help, wind numbers, California has had solar.

Ploger:  The bigger picture is image.  The potential of renewable energy in Kansas - not putting in turbines in Kansas, if donít have net metering.  Image problem, in California they not only have 700 KW, they still canít get net metering.   If we donít have net metering and renewable energy, they (who?) wonít come to Kansas, they will go to New Mexico, the overall big picture, is political.

Volker:  Michael made his presentation.  This is not going to make or break a utility, big picture in the state.  The devil is in the details on how to write the law, this is a big deal, as an economist, I have 3 different hats - utility, policy making, and economist.  I have a problem with writing policy, and am in favor of providing subsidies, but dead set against net metering because of policy.  

ďIs Net Metering Appropriate Policy?Ē

Net metering discussion:

Holloway:  Subsidy Ė use system benefit charge.

Ploger:  There are political things that we get calls about Ė someone who owns an acre of land, and wants to put up windmill.  We tell them to make their homes more energy efficient rather than put up a windmill.  

Volker:  Nothing is fixed in the long run.  Net metering has gone twice to the legislature and failed both times.  Tom Sloan has said not to come forward with it.  If you can get the utilities behind it, it may be successful.  

Johnson:  Is there something we can do at that level?

Phelps:  Do utilities care?  In representing citizens, we recognize the additional costs, the experts opinion on what those costs mean, are not known to lawmakers.

Johnson:  I think they do know.

Volker:  Those customer owned utilities do care.

Phelps:  This is a broad issue.

Holloway:  The most that can take advantage of this is not urban customers.   What utility has the largest square miles of Kansas Ė Midwest energy, but they are not the largest company.   A system benefit charge that stands behind net metering, this is a state issue, state policy should stand.

Silver:  This is a political statement, reciprocity in Kansas.   Should stay connected to your utility and be happy.

Phelps:  What does make sense?  Wind farms?

Nelson:  Wind farms are the best bet.

Silver:  What is the focus of this activity?

Holloway:  It shows us as progressive and innovative.  I hear Donna say that would limit technology.   We need definition that utilities would buy into it.   We should make sure that they are not overwhelmed with what the intent was.

Volker:  Alex makes a point about the emotional issue, I refuse to argue on the emotional issue.   Could argue on political, or economical issues.  It doesnít make any difference about how to achieve that.  In 40 states, not all laws are net metering.   Look at who does have net metering and who doesnít, not good policy.   I would like to encourage small systems.

Johnson:  This report is to promote renewables.  When renewables came up, it was not because of net metering, it was a combination of things.  Question:  do you want to start that push to get things moving?  Could recommend tax credits, but is that going to go through in todayís economic state?

Volker:  There is a difference between California and Kansas.   California has less grid costs, Kansas grid costs are higher.

Allison:  Renewables and Utility committee may want to talk more about this.

The group went into breakout sessions at 1:35 p.m., and are to be back together as a whole Council at 3:00 p.m.

[Utilities Committee breakout session:]

Volker:  We can come up with a name as a gas person to serve on the Council.

Springe:  At Kansas Gas Service Ė Brad Dixon, or Bill Eliason, who is in gas procurement, would prefer to have someone a little higher up.

Allison:  The Council should come up with recommendations for the plan that will make an impact on energy in the state.

Holloway:  I think we should look at a system benefits charge.   For instance reestablishing something like CARE, something similar to the Retail Wheeling task force.  One of the problems is that it did not have broad support, the concept was that utilities had heard about it before hand.   It had some designated useful direction, was broad based, and included all utility consumers in the state.  It may not fail.

Springe:  Any charge has to be accessed to everyone.  If utilities Ė gas and electricity Ė any revenue generated must be towards a utility issue (consumer), what we are doing is statewide, this system benefits charge on utilities would be an easy way to get money to disperse far and wide.  It is important to know what is coming out of the pockets and where it goes.  If the decision is to go that way, it is not on behalf of the people I represent, it is not something we talk about.  It would be less than a mill, and would get paid by everyone.   This is not bad, and is a reasonable nexus to what it is doing.

The second layer of the problem is that we charge consumers a fee, we do weatherization, it has different impacts on different consumers, also how to implement.  These are equitable issues once you move past the first level of should we charge.   $.50 a month look at something.  

Holloway:  To defend the larger companies, this is a bigger amount of money.

Springe:  It is difficult to move from a conceptual level to on the ground running.

Volker:  I just threw up the $35 M to illustrate, to show political realities.

Phelps:  So when we get the money, what are we going to do with it?

Holloway:  We would need to figure out what the money is to be for.

Springe:  I sat through the last legislative session, everything that was to cost was added to the consumers costs, it was added to the bill somewhere.

Volker:  I would be against a systems benefit charge if it goes to the general fund.

Springe:  A considerable amount of thought needs to go into this before taking to the legislature.

Phelps:  Utilities are going to be a transfer agent, donít the renewables guys need to explain the need to go forward with a net metering concept, systems benefit charge?

Springe:  That is if it is used for renewables, like Kansas Gas added an amount for low income.  It can get very big very fast.

Holloway:  It is ironic in the state that you have lifeline rates for low income for telephones but they canít get heat.

Springe:  The problem was in the telephone rate charges, it may be possible to put it in an up front cost.

Allison:  If there was a pot of money that a utility could get a low interest loan for improvements, it would make the system more efficient, and make it more reliable.  Could look at efficiency of electrical transmission, there are things we can do state wide to improve efficiency.  A system benefits charge would go to improve infrastructure, and this would be long term for consumers.  Research may be done but it costs to implement.  Could open up the state to wind power generation.

Springe:  At a lower level the RTOs are to provide a mechanism where transmission needs to be upgraded, with an efficient price.

Holloway:  What about time use metering, and get the information to people.

Springe:  It is worthy of looking at, like net metering.  Portland tried an experiment, it didnít go well.  There are things being looked at, it is in a realm of this committee to look at different ideas.  I would be in favor of a systems benefit charge on gasoline, and I drive from Lawrence every day.

Allison:  Where would you propose that money go?

Springe:  I would have to work on that.

Volker:  It seems all of you think a systems benefit charge is good if we can find a use for the money it generates.  We could come up with a recommendation that breaks out on a percentage basis how it would be used.  We could have 3 categories of uses for that money, on a percent basis, and bring it back to the committee to see what they think.  This is not going to be for the committee to solve the detail answers that benefits charge for.

Pajor:  We should not start with the expenditure side.

Holloway:  There is a need for R&D, could work with a university, the focus is to be on Kansas utilities and customers.  Just thinking broadly about research at power plants, fly ash eventually benefited power plants, but I donít know if it still does.  Not only would we focus that on Kansas universities, but provide benefits for utility customers.  

Springe:  There are lots of good ideas for uses Ėeducation, weatherization, etc.   We could then start putting together numbers, like for a low income utility program, to help pay their bills.   That alone, when you look at all the utilities in the state, this is huge money, may require that we step back and become more focused.

Volker:  This would be taxing imports of generation as well as local generation.  We should make sure we are doing more balancing.

Springe:  We are spending money on renewables, that helps the native, it doesnít help the systems benefits charge to be used strictly in our mandate, for native clean generation, and to be sustainable.

Volker:  There is nothing in our mandate that says clean.

Holloway:  We could look at how some other states are set up.  Some have a revolving conservation fund, and say you have a house you want to do an energy and conservation upgrade on, you could get a loan, pay off the loan with minimal interest, and that goes back into the fund and keeps being used for projects like that.  It could be something similar to that, maybe it should be energy conservation.

Volker:  It should be in renewables.  They talked last time about conservation.  Your point about one mill - there is clearly a difference of 1 mill, but if it is put on all utilities, it would be renewable generation.

Springe:  Would that be better than renewable portfolio?  You are going to put something on my bill?

Volker:  It would be economic efficiency, renewable portfolio doesnít allow for that.

Springe:  There is a time lag difference, with rate cases.  Which way is best and most efficient?

Volker:  They would say do both.

Phelps:  It would ultimately lower the cost of energy into the future.  In the realistic long range, there are paybacks, like an investment and a benefit.  If we are just raising money to build wind farm.ÖÖ

Volker:  Could make one use for research and development of energy conservation.

Holloway:  In Kansas.

Springe:  Under energy conservation, I put weatherization for residential.

Volker:  There is cogeneration, renewable generation, energy conservation, R&D.

Springe:  We should talk about this, the rest of these are very energy centric.

Pajor:  The reason, bringing back in, the low income rate payer, you could create another niche.

Holloway:  It could be how you apply the charge, like for weatherization, etc.I think the R&D should cover all this but low income.  We are not talking about basic science, it might be something in the systems benefit charge that could be a revolving loan, for research rather than to apply.

Springe:  One other use might be to provide this group some funding.

Holloway:  If you give this group some funding, it would end up with legislators on it.

Springe:  If you charge the utilities there should be a benefit to the consumer.

Holloway:  You may find out that a minor part of this for administration might bring in a lot more money in the long run, like for a grant writer, could take the money we collect and maximize its use.

Phelps:  Could create a center of excellence.

Holloway:  What happened to power quality lab?  Were there problems with the professor, Ward Jewell?  He was one of the best in the country but was not very good at bringing in funding, but he was good at research.  You would also have administrative costs.

Springe:  I am opposed to using utility customers to fund a lot of these things.  1-5 are fairly utility centric.  When you start talking about administrative costs, I donít have a problem with utility things, but a systems benefit charge is to be used for utility centric activities.  If the committee wants to use it for something else, I have a problem with that.

Volker:  If you use the term low income assistance, part of the funds would go to administer low income assistance.

Springe:  Because we could go around and around a lot on this, and we have the basics out there, this is a work in process, I suggest we move on to other items we need to cover today.

Volker:  Real time pricing.

Holloway:  Do the research.

Springe:  What is going on out there?  Get representation from the committee.

Holloway:  Aquila and KCPL have some initiatives, they have big customers, they use during peak times.

Springe:  When you go to residential customers it is difficult.

Volker:  I am with a small investor run company.  Who do we have that would do this?

Phelps:  Are we going to press forward with real time pricing at some point?

Volker:  Demand side management, call it demand response, include in that real time pricing.

Pajor:  For sufficiency of future energy capacity, does anybody look at that?  We do our 5 year forecast.  Is the utility committee looking at that?

Volker:  That is supply side stuff.

Holloway:  EIA 4-11 reports, we are better off to use those reports.  You can throw a lot of economic stuff into consumption, they are based on reliability forecasts.  There is a lot less economic modeling than you think there is.

Volker:  Economic resource planning Ė is that what this council would be responsible for or the state?  What about education?

Pajor:  What is the energy generation mix?

Phelps:  Many of them are state issues.

Pajor:  We started this with generation capacity Ė what primary fuels are we going to have in our mix of future generating plans.

Volker:  The state level generation planning.

Springe:  When Westar goes out, what do they look at in needs?   The process happens at the individual utility, with the demand side of the market.  What next step are you contemplating?  Are you suggesting that each of the utilities, as a group, build a coal plant.

Pajor:  Conceptually we as a council would look at what those plans are, and see what they are going to do.  We would become educated, know what the plans need.  Then as the state energy policy group, is that something we should worry about, or is KCC doing that?  What is it that is not getting done, how is it that the state is better off because this group exists.

Volker:  No one is coming up with comprehensive policies for the state.  No one is insuring low cost, the context from governor is that they have problems with us becoming a net importer.

Allison:  The State Water Office does what we do in energy.   They have 23 staff members, and have $18-20 M a year.  We are a volunteer group.

Volker:  This is not something we need to do separately.  

Holloway:  One of the products of IRP is a supply plan.

Springe:  The product of IRP is booklets that no one looks at.

Holloway:  It could be a policy recommendation of developing something like an IRP.

Volker:  That is something that is embedded in the charter of what we have to do, energy needs and supply of the state, not a utility issue.

Holloway:  We do look at.

Pajor:  How do we make sure, so we could answer the question.   So that we donít get into the situation that California is in, like being the next Enron, we are out to have more sensitivity that CEOís sign off on.

Holloway:  The KCC already addresses and has addressed for a while, I donít know how to make you feel better about what this council is taking care of.

Volker:  This groups' level - we are doing production, supply and demand, and looking at how the needs of the state are going to be met.We have an obligation to serve, that is part of every utility of the state, meeting the needs of customers in the future.We do it.

[Full council:]

Allison:  I would like to ask each chair of the committees to give a summary of issues, and what you are dealing with.

[Petroleum Committee Report:]

Dayvault:  We are looking at more of what is going on in the industry, and to what some of the things are that the Council should be considering.  One new thing is the high level of interest in coal bed methane in southeast Kansas.  There is additional leasing going on, and more drilling.  The price of gas is remaining at the same levels, which shows greater confidence, and economic viability.  In terms of what the state can do, and from a policy standpoint, we recognize that the KCC has been accommodating in being able to rewrite rules to make projects viable.  Perhaps research institutions should provide greater amounts of information on what zones are productive.  They could provide these to people who have an interest in exploring production, this was a flash in the pan a year or two ago.  As a Council we should promote protecting lower production oil and gas wells.  The threshold for a severance tax exemption is $4 per barrel a day.  There should be a way to increase that in the political environment to get it to the $8-10 barrel a day range.  It would be helpful in protecting these wells as prices of goods and services, and drilling of wells increases.  Prices are going to be softer as the Iraq production comes back on the markets, and as additional amounts of oil comes into the markets as well as other sources.  This committee discussed what the state might do to help with carbon dioxide flooding, like the pilot project in Russell County; or with state and federal involvement, like the Hall Gurney undertaking.  They are several years away from proving technology.  Also, this committee talked about improvements, more engineering constraints, and the economic potential of carbon dioxide flooding being quite large.  We will learn more about this over the next few years.  The other part of carbon dioxide flooding that will be difficult to overcome is the source of carbon dioxide.  There is an ethanol plant nearby that will work for this field.  The other closest source of reliable low cost carbon dioxide is Guyman, OK, which would require a pipeline to make it work, that would be high cost.  Lee Gerhard reported about a project he has interest in:  encouraging the exploration of new areas, new ideas, areas that have not been looked at recently.  State research institutions could help to promote ideas not necessarily picked up by industry sources.

Gerhard:  The state is still going to be 90-95% fossil energy, not sure how to import it.

Silver:  On renewables, I went down the list of recommendations, and reviewed where we were.  Are they still important to us?  Generally, I thought they were.  The conservation task force, in listening to your discussion here, is there an issue in transmission in gas?  

Dayvault:  We can overcome issues in the private sector.

Silver:  We could establish a working group to investigate ways to do business.  Richard Nelson could be in that group, he could champion that cause, circulate the request, and get feedback.  For the annual energy conference, we are having trouble finding consensus on what that would look like.  We want to review energy programs from other states, we have a good start, and developing an awards program to participate in.  The issue is that we want to elevate to a higher level.  I think that is very key to a number of activities, not just for this group.  It is tied to dollars, which are hard to come by.  It should be a commonality to gain support from other areas.  Identify the need to know what is going on around us, as in educational issues, and keep track of certain things, be aware of issues, and offer to do that (keep track).  The working group could encourage energy development in Kansas Ė coal fired generation systems to support or back up wind turbines.  I think we jumped over external energy sources, if a hydrogen based economy, we should be sensitive.  

Allison:  the R&D or committee task force was one of 5 items to go through, but we didnít have the staff.  We could appoint Richard chair of the R&D task force for the Council.  If someone here wants to volunteer to work with him, or we may have to bring in someone from the outside, let Lee A., Liz or Richard know who.  

[Utilities Committee Report:]

Volker:  From the utilities committee, we decided that there was a need for a gas person to be on this committee, we will send potential names to Lee A.  We also spent some time discussing the systems benefit charge.  We agree that it needs to be done, and have a comprehensive way to do a lot of stuff.  There is concern from a member regarding how the costs that are being collected from the utility customers needs to come back to those customers in some way shape or form.

Springe:  If doing as a systems benefit charge, and to do globally, I suggest something more than electric and gas.  Utility customers are an easy mark, am concerned that we put the charge on their bill and then use it for a broad use.  I'm not opposed to putting it on the bill, but who is being charged and how it is used.  We need to have more talk about how it is used, how it is charged, and who is charged.<

Volker:  Without prioritizing and detail Ė we came up with some categories Ė the idea is that we take the idea forward and nail it down. This would be an application for R&D Ė a number of areas - energy conservation, weatherization, commercial and industrial, cogeneration, renewable generation, potentially low income assistance. We are open to suggestions, and anxious to bring a refined version forward in the future.  There is a broad category of issues we mentioned before: demand response Ė look at real time pricing and a number of other areas.  We had a lot of discussion on looking at generation issues, supply plans for the future, we came somewhat to a conclusion that we are covered.  

Holloway:  Also, how do you administrate this fund?  It seemed like when CARE was around they were able to lobby to be able to use the money around the state.  The Administration's view is that it was a waste of time, as opposed to someone who goes out with $50K and brings in $200K.

Johnson:  Lots of times there are matching funds.

Snead:  Did you discuss funding SERCC?

Volker:  We suggested funding the utilities committee, self raises.

Holloway:  We did discuss that, there are some problems with doing that.

Volker:  Implicitly imbedded in the categories for uses. Perhaps needs to be explicit.

Snead:  Whether the Council looks at all these things, includes all Kansas citizens, we can make progress on these issues, hire staff.

Holloway:  Utility customers pay for R&D.

Springe:  You note that we didnít have R&D for petroleum, not because it isnít important, just think it should be a utility nexus.  If you do a lot of broader things, we donít want just utility customers to fund it.  Our recommendations come from the utility committee.

Holloway:  Is there staff or an organization for this?  I donít want a funded person to call me up and assign me more work.

Volker:  What needs to be done, we could debate, and come back with a proposal as to what it would look like.  Somehow sooner or later, this group is going to have to be funded sometime.

Snead:  The Council recommendations, two of that committees raised systems benefit charge. For the Council to perform, it is going to have to be funded.   Is there another way to charge?  What about energy systems?

Holloway:  Leeís organization should have some funding for everything they do.

Allison:  We see some synergy between the utility and renewables committees.

Old Business: Staffing and funding for council activities: nothing to report.  One question was where is Scott White. Scott works at the Survey, for the Energy Research Center. Last fall we were able to scrounge up some money for him to work on the Energy Council, but we donít have any more funds.  He has some funding from KCC to run the Wind website.   I would like to talk to KCC to see if there might be some support from the DOE proposal/grant you just sent in.

It seems there are three possibilities: state funding but not this year, systems benefit charge, find a federal agency to see if there is a program there. Liz, we need to find some time to talk with Jim Ploger.

Silver:  What if we generate the same level of product as last year, are we talking about a person?  What would we like to have.  

Allison:  The energy plan can be updated, we are not starting from scratch. It may not be quite as big a burden as last year.

Liz:  I can see that the energy plan can be very different, the 2003 plan was a summary document, it was an overview of things in the state. We could include new material, policy recommendations, and can see essentially a new document.

Allison:  We also may want to put more substance behind the one sentence or statements from last year.  In terms of a person year, we had 3 of us scrambling for the last month.

Silver:  What does that mean?  Are we looking for funding or are we dreaming about $25K?  More than that?

Allison:  Yes, that would make a big difference.

Brosius:  Doing the plan, up to producing the plan, we were up to $60K.

Allison:  We couldnít even think about doing a conference, we have no money. Liz has had to work on the Energy Abstract when she can.  We were required to do an energy plan, we did that.  If we want to take on some of these other tasks, they are upper end.

Silver:  I'm just trying to get a feel for the cost.

Allison:  The other thing we wanted to do was to review other state programs. Jim, we wanted to get with you about this.

Ploger:  Donnaís company did that about three years ago. We can get you copies.

Allison:  The Energy conference is on hold, there is no staff, and no funds. We will not piggyback the Energy conference on the Wind conference.   I made a presentation to the House Utilities committee about the Energy plan and the Council.  Tom Sloan was upset that we had refused to support or assist the wind conference. He had misunderstood why the Council was not doing an Energy conference.

Johnson:  The Wind conference will be Sept. 29 and 30 in Wichita, and will be held with the Biomass directly following (piggybacked).

Allison:  David Springe has volunteered to chair the awards committee.

Springe:  I donít think I said that.  I talked with Brian Moline about this, he will chair it and go to Ploger and Holloway for help.  I thought that was a good idea.  Brian will chair the committee.

Allison:  Anyone that wants to serve on this award committee can let Liz or me know.

New Business:  None.

Allison:  The next meeting will be July 23rd, in Wichita at the KCC.

Dayvault:  I will not be able to attend that day.

Allison:  Please send us an e-mail if you cannot attend, we may want to find another day.

The meeting was adjourned 3:55 p.m.

Notes taken by Debbie Douglass, Kansas Geological Survey.