State Energy Resources Coordination Council

November 19, 2003

Kansas Municipal Utilities offices, McPherson, KS

Meeting was called to order at 10:05 by Chair Lee Allison. Allison thanked Colin Hansen for set up of meeting place and directions, also refreshments.

Present: Lee Allison, Earnie Lehman, Colin Hansen, Alex Silver, Dave Phelps, Larry Holloway (Moline), Liz Brosius, David Springe, Spencer Depew, Galen Menard, Dave Holthaus (Hart), David Dayvault, Rick Anderson, Scott Schneider, Richard Nelson, Kyle Wetzel, Bruce Snead, Jesse McCurry, M. L. Korphage

Menard: Tour of NCRA refinery following meeting; bus will arrive at 2:30. Asked tour participants to sign up on list. The tour will take about 1 hour.

Allison: Larry Holloway is sitting in for Brian Moline and Dave Holthaus for Barry Hart. We have a number of reports this morning, beginning with a presentation from Earnie Lehman, COO with Midwest Energy, and Chair of the Transmission Task Force. Task Force’s work is not completed, but progress report.

Transmission Task Force Interim Report
Lehman gave a powerpoint presentation and circulated a more detailed version of his interim report. He noted that a majority of the task force members were present at this meeting – Larry Holloway, Kyle Wetzel, Rick Anderson.

Interim Report: Current system is reliable and adequate, industrial development has not been hindered by reliability or electric cost concerns, transmission system expansion is governed by processes outside of state control. Process for considering transmission system expansion does not work well. Four meetings in 44 days, conducting assessments accepting polcy development and next step assignments using buddy system. Low risk, economic development not been impaired. Federal authority over transmission has expanded thru legislation and regulatory rulemakings. Regional power pools now process new transmission service requests. Utilities do not have priority for tying in their own generation. Formal process takes months at best. Problems with Process....., Problems with Cost Recovery....Next Steps – Assess long term transmission reliability.......

Dayvault: What part of the state has least capacity to absorb new generation?

Phelps: Southeast Kansas would be where we would put new generation [has the best capacity]

Silver: Depends on where the load is

Holloway : Depends on load and generation

Allison: Who sets powerpool?

Holloway: Independent board of directors, advisory group.

Springe: Are you seeing that the state does not need to spend a lot of money to expand or increase transmission? Not the focus?

Lehman: To serve current needs, that is correct. We have not yet done the long-term analysis—in the future there will need to be some expansion on transmission system. Example: Sunflower has said that they had 6 requests from customers for the new Holcomb plant, 50-60 M dollars for, customers planning to build own transmission system for Holcomb

Holloway: A concern from the regulatory side is that these companies are willing to put up 16-20 M for first year for transmission. Southwest powerpool independent board would hope that this regional committee could tell board that it has to do certain things, that have to be filed with FERCC, disadvantage in Kansas, have seen policy drafts out of Arkansas and Oklahoma.

Allison: Does the task force have a recommendation at this point for this council to adopt for 2004 energy plan?

Lehman: Not at this point. Develop effective advocacy group, incorporate these recommendations into report.

Silver: would take a step further. Can’t have a part time committee, needs to be full time group.

Allison: Thank you for what your group is doing, in such a short time period.
I had asked Alex to report on system benefits charge ad hoc committee, would like to postpone this until 11:00.

Kansas Summit on Natural Gas
Brosius: The natural gas summit report was delivered to Gov. on Nov. 5, then circulated to council members and participants of summit. Report summarizes short-term recommendations: council identified 3 things that could be done in short term. Report posted on website, have copies here today.

Allison: Press release going out shortly.

Springe asked whether all the recommendations that came out of the natural gas summit would be included in the 2004 Kansas Energy Plan, indicating that he had reservations about putting the whole list in the plan. Allison said the council tried to capture some fo the summit recommendations in the recommendations they proposed at the last SERCC meeting. Brosius said that the intent was for the committees to review summit recommendations and incorporate those that seem likely into their 2004 recommendations; the natural gas summit report will be included in the energy plan document.

CO2 Linked Systems Project, Russell
Allison: I want to invite you all to the valve turning, on Dec. 4, in Russell, of the CO2-linked systems approach. First project in Kansas. Used in West Texas and New Mexico. Hope to extend life of these oil fields in Kansas another 20–30 years. Work on this project has been going on for 3 years, multi-million dollar project. Hope Governor & Lt. Governor and other officials will be present, then go out and see the operation. Also will look at ethanol plant in Russell.

Allison: Does Kansas want to compete? Met with Lt. Gov. yesterday, he was very supportive, asked the council to take lead in the state. Federal support – Keith Yehle asked if we have expertise in Kansas to participate in this? Action item for 2004 plan would be to develop subcommittee to look at Future Gen to see how we can compete, put proposal together. We are already behind: Texas Dept. of Economic Development transferred $10M to enhance development to compete. West Virginia has contract from their economic development office to locate 6 sites to bring forward one site for competition. Need to look at what we need for proposal. DOE put up $800 M of $1B cost. Looking for matching funds. 275 megawatts, also produces hydrogen.

Holloway: Look at Great Plains Gas Energy website for more info.

Allison: Lt. Gov asking Energy Council to take lead on this.

Dayvault: What are our competitive advantages to other states?

Allison: Closer to Wyoming coal, CO2 sequestration.

Holloway: Need to look at use of hydrogen

Allison: Generating or fuel cells

Holloway: Do we have available gas pipelines to transfer hydrogen?

Allison: Need committees to look at and discuss, a lot on technical side that don’t fully understand. Don’t want to miss opportunity. Kansas does want to try to compete.

Springe: Create committee?

Allison: Action item.

Education activities
Brosius: Shari Wilson, KACEE, who attended our last two meetings, contacted us about ways that KACEE could partner with SERCC to promote energy information. She suggested that SERCC or members be involved in the next KACEE environmental education conference, in Dodge City next November. The them is energy and they plan a visit to the wind farm at Montezuma. Also, KACEE has trained facilitators, who could lead the public through discussion, if we want to get public input. Will be pursuing educational efforts throughout out the coming year, as well as with KIOGA Foundation.

Allison: Modify our recommendations for education from last year.

Allison postponed discussion of Rural Life Task Force, energy issues, until later meeting, due to time constraints.

Wind Energy Siting Guidelines
Alex Silver reported on the Renewable Energy Committee’s discussion of wind energy siting guidelines.

Silver: Guidelines were developed from national guidelines by KREWG (KS Renewable Energy Working Group). Response from developers and communities – guidelines balanced – don’t think SERCC would have any problem adopting them, putting on website, we reviewed and liked it. It’s a good document and should be made available to public.

Allison: We’ll put it as study item for this year; council will consider adopting.

Wetzel: These guidelines were created out of committee chaired by Nature Conservancy and Brad Loveless at Westar. Came out of controversy on wind farms in Flint Hills.

Snead: We’ve had requests for this info from counties; it is already out there.

Allison: I suggest we look at this document to see if the council can formally adopt. If want to modify, need to listen to various sides. Our role would add some gravitas for counties. Could post on website as resource identify where from. Consider adopting at next meeting.

Federal Energy Bill
Allison: Anyone have any insight on what is coming out of Washington – federal energy bill?

Holloway: there is a net metering provision in for every utility. We got into the systems benefit charge from the net metering issue. Is in the electricity section of the bill.

Wetzel: If same language as I saw before wasn’t to be mandatory.

Dayvault: From tax provisions, there’s continuation of coalbed methane credit that would have expired for production, open up new window, run through 2009, increase to just over a $1 for anything over ?MCF. Great impact on state – marginal well tax credit when barrel is less than $18 and gas $? MCF. Price protection. Streamlining drilling on existing federal lands.

Hansen: More disappointing is the loss of tradable tax credit. Victim of negotiations. Still hope for substitute.

Wetzel: Thought there was something in the bill that would eliminate the cost of transmitting electricity for whoever is first requesting. May have been stripped out of bill.

Menard: Heard that some of the Alaska pipeline part was stripped out.

Kansas Energy Plan 2004
Allison invited Silver to report on the ad hoc committee’s SBC (system benefit charge) proposal.

Silver: Volker picked up the charge – SBC – yes it is a tax, way to raise money. Trying to be objective – makes sense, allows funding of activities such as SERCC. In order to do anything and be effective, we need some funding. What is SBC? It’s a volumetric charge on customer’s bill to fund energy activities beneficial to Kansas. Focusing on utility costs. Already SBC on gasoline.

Limits on SBC volumes: electricity: rate: $.05 per kWh, no charge for first 300 kWh in a month. No charge for consumption over 2,000,000 kWh in a month. Revenue: about $1M, $.25 on a residential bill. Natural gas: numbers are less, proposed $.01 per MCF, $.08 on residential bill. Use of monies: State Energy Planning Office, not more than 5% of SBC revenues. Renewable Energy Electricity Generation: minimum 20% of monies for R&D. Energy conservation, & fossil fuel production. Concern of committee on usage of funds. Concern won’t be used for energy related activities.

Springe: Not fair to tax general utility customers.

Holloway: Seems we are developing a different office that may have different goals that the already established energy office—Jim Ploger’s program at KCC.

Silver: Concept is SBC, that is in the detail, don’t have answer.

Springe: State energy planning office would be SERCC, not the Energy Office at KCC.

Wetzel: Lots of work to be done on topics SERCC keeps raising that require more than a volunteer council. Envision a body that would tackle these issues. Look at Iowa that has 30-member energy office funded by state. Tax electricity to fund energy office. Could look at gasoline tax for funding. Envision that this energy planning office would be rolled into KCC energy office.

Allison: The Natural Resource Legacy Alliance will be submitting their report by Dec. 1 and there’s talk of a natural resources division. It would be good for us to have idea of where we would come in.

Hollaway: On gas side, could bypass KS jurisdiction and customer can go directly to pipeline, can state go back and collect that?

Silver: Can state allow a municipality to avoid SBC?

Springe: Appreciate what Michael Volker and Alex have done, but I’m extremely concerned about this, disappointed that utility customers will be responsible for financing energy policy of state. KWH charge is based on all consumption in KS, don’t think you can make state law apply to municipality. Not sure can put SBC on every kWh sold. Same for natural gas side. Don’t think that $0.25 on a utility bill is wrong; I’m just reluctant on this form, should be SBC to fund several issues. When we go to legislature and say should be SBC, you don’t know where things are going from there on. They could say “what is a quarter, let’s make it $1.00.” Working with legislatures for buy-in that they don’t take idea and run, and keep it as submitted. Not ready to go to legislature.

Holloway: When we debated this earlier this year, the funding was for electricity. Funding fossil fuel production seems curious; if electric customers pay for it, benefit should be to electric customers.

Wetzel: Holmes said couldn’t get $0.50 on 911 cell phone bill; he likes the SBC but doesn’t think it would go through. There’s a fear it will turn out like California, where they made it 1/10th of a cent, and now can’t give money away. If this is alternative to net metering, it’s hokey. Need to be clear what it is going to be spent on. If proposal is not specific on how money is to be spent.

Snead: The primary motivation was to find way to fund SERCC planning and programming initiatives; so far, I haven’t heard any of this. What is politically achievable? We can’t wait, need something to develop funding. Something better? Go with that, failure to move forward will cripple what has been done so far. If the money comes from property tax, or other sources, or if there’s another equitable way to fund energy policy and activities, let’s hear it.

Wetzel: Don’t think $600,000 will go very far in funding energy office and activities.

Silver: Don’t want to go down path to subsidize special interest. Funding administrative activities, policy activities, make it $10 M. This activity deserves to be funded.

Springe: I agree. I’m not objecting to what funding is for; I’m just opposed to utility customers being charged. Not where we can send to legislature for broad activities.

Lehman: One element of history we ought to remember: back in the 80’s, utilities were required to spend on research programs, was an option of 20% to be dedicated to state energy programs. Urge you to consider history.

Wetzel: Incremental approach, first attempt, limited scope, get foot in door, add pieces later.

Springe: Gets back to SBC charged to who, legally get to everyone.

Holloway: If we assess electricity customers, should go to electric customers, discussion came out of net metering, was an alternative.

Silver: Net metering affects a small number of people.

Wetzel: When looking at states around us, they have people doing energy work that is funded. Don’t see problem splitting utility from oil and gas.

Holloway: Not opposing use of money for administrative use. If not connected to services received by people paying for it, problematic.

Snead: What is alternative, how does water office get funding?

Allison: Fees, general funding.
Springe: Should come from general funding, not from utility customers. May not be realistic.

Snead: We have to come forward with something, make the case or don’t. Compare to water office, everyone uses water. Does everybody benefit? Yes.

Allison: After lunch, we’ll adopt recommendations. I’ll ask you to think over lunch, bring forward the proposal, vote on as it is, or modify to make more focused on SBC for state energy policy and planning. Modify the amount?

Galen: We would be big payer, concern where money would go, policy development or planning office OK, but if it were for projects, we’d would want to know what projects.

Silver: How do we address the home rule issue?

Springe: KCC - If intent is to get all end users, can we get all end users? Does utility have right connotation? Not generic.

Holloway: Not sure this is much of an issue. There’s legislation out there that has affected all electricity utility in state.

Lehman: To get through legislature, you have to know where money going. You all are discussing where coming from.

Break for lunch: 12:05 p.m.

Reconvene at 12:55 p.m.

Kansas Energy Plan 2004—Recommendations
Brosius circulated list of proposed recommendations.

Brosius: This is the list of recommendations for 2004 plan that came out of committees at our last meeting. The recommendations are numbered to aide discussion, not to indicate ranking. On # 3, we need to correct spelling of word “pool,” and I think #13 and #14 can be combined. There’ll be some overlap between some of the other recommendations as well.

Wetzel: Did you say this is last meeting?

Allison: Yes, this will allow time to pull together the energy plan and get it back out for review; due to legislature, Jan. 12.

Allison asked for discussion of each proposed recommendation. Decided to skip #1 (SBC) and come back to it after going through others.

Allison: Turn to petroleum folks, they had most specific recommendations for legislation. Reads #2 and #4:
#2-Recommend that the Kansas legislature increase oil and gas industry production levels and prices for oil and gas for obtaining exemptions from the severance tax and the ad valorem tax.

#4-Recommend that the Kansas legislature give consideration to granting expanded exemptions from severance and ad valorem taxation for oil and gas production and other energy activities that result from implementation and use of advanced technology, methods, and procedures.

Depew: Content of #2 is in #4. We have enhanced recovery, want to make broader.

Allison suggests combining language of #2 and #4 into one proposal.

Depew: Last part may apply beyond oil and gas production, could be for refinery, broader than production, wind turbines, anything.

Dayvault: Another piece is to look at trigger points at pricing standpoints, for low production, allow for certain base level of production that could be kept in periods of low prices, tripper points raised for increased costs, probably what #2 was for.

Depew: Wouldn’t cost the state anything.

Dayvault: 18-20 is more realistic trigger point. Could be written into #4, not currently in #4.

Phelps: Intent for oil and gas?

Dayvault: yes

Menard and Depew: No other energy for tax exemption.

Allison: Do we want to go back to having #2 and #4 as separate?

Dayvault: Probably.

Depew: Don’t need to.

Dayvault: We need word help, talking about prices and production levels in #4.

Brosius: Can you do now, or need time?

Dayvault: Need time.

Allison: If I were to put forward motion to incorporate #2 with #4, with understanding that committee to clarify wording. Different trigger levels for ad valorem taxation for oil and gas production.

Depew : Wanting to reward new energy technology, wind energy might qualify

Holloway : It already does, more concerned about general.

Allison: Problematic in drafting legislation.

If we can’t resolve this at this time, we’ll ask the petroleum committee to recraft, and we’ll send out electronic ballot. Could your committee recraft #2 and #4 and we’ll vote on it in the next week?

All: Yes.

Allison reads #3:
#3-Recommend that the Kansas legislature amend the K.S.A. 55-1302 definition of “pool” in order to allow unitization of more than one single and separate natural reservoir if the same are in communication so as to constitute a single pressure system.

Depew: Something in last three years, argued you can’t have 2 formations, committee wants to clarify that you can have 2 formations and call a single pool.

Korphage: KCC has already ruled that you can, appealed.

Council unanimous in adopting #3 as recommendation.

Allison reads #5:
#5- Recommend the amendment of Article 9 of the Uniform Commercial Code to restore a priority creditor status for sellers of oil and gas production when a purchaser is in bankruptcy. It would follow the language of the former K.S.A. 84-9-319, which was repealed in 2000 without any input from the oil and gas industry.

Depew: Farmland cost a lot of money with bankruptcy.

Springe: Not appropriate for energy policy; it’s a finance issue—bankruptcy commercial code, not energy policy issue. The issue is legitimate.

Depew: Helping energy in general, oil and gas.

Springe: Helps energy people. Is this the proper nexus for SERCC? Concern of Kansas?

Dayvault: Energy policy issues, Prior to farmland, 4 others – energy producers find from credit worth, price implications for producers and state in general, severance tax collections.

Depew: This is money that didn’t get reinvested in Kansas.

Allison: I think we can take as broad a role as the council is willing to take.

Phelps: Commercial code in 2000, clients request a deposit?

Dayvault: Didn’t realize the change in language until we had a problem.

Springe: Who modified code?

Dayvault: Legislature.

Holoway: What about oil and gas companies that got stung also?

Silver: Corporate policy could have been avoided, can be as broad as want.

Depew: All this does is bring back law as it was before, oil and gas production only.

Holloway: Established priority when people are owed money?

Springe: Not sure making recommendations out of the energy council is appropriate for commercial code.

Allison: Move forward as it stands, or make it for all energy providers, or is this outside of our expertise?

Depew: It’s energy related.

Phelps: Specific to a provider or to a specific thing?

Holloway: Can affect Kansas producers, more general .

Allison: Not breaking new ground, returning to law as it was before.

Menard: Can a state supersede a federal bankruptcy law?

Depew: No, this was copied from Texas.

Menard: Judge can take under advisement.

Springe: This recommendation is going to legislature with a SERCC label, not that it shouldn’t go to legislature, but should it go with a SERCC label?

Holloway: Your concern is that it would not be referred to a utility committee?

Allison: This would be another committee .

Vote on proposal #5 as written: 6 for, 1 opposed, 2 abstentions.

Phelps: Motion for amendment – insert “and other energy providers” after production.

Holloway: Hearing a few people that buy the oil in the state and getting smaller all the time, protect the fact that limited market, lot of different customers, big customer, hurts when they go away, can’t collect.

Wetzel: If passed as amended – energy providers at front of state, not self serving. Rather than focusing on energy benefits for Kansas.

Phelps: Protect someone that might not have good business practices.

Silver: Five of these are industry specific, do we want that to be?

Allison: #5 has passed as written, if time at end, we can revisit.

Allison reads #6
#6- Recommend the adoption of favorable legislation to assist in the exploration for and production of coal bed methane gas. This would include granting an extended period for severance tax exemption under K.S.A. 79-4217(b)(4) from twenty-four (24) months to forty-eight (48) months or more.

Dayvault: There is an 18-24 month period of time for dewatering, not producing commercial product in commercial quantities. Traditional – 24 months to recoup investment, this would put on equal footing with traditional gas production in terms of being able to have exemption for time to recoup costs.

Allison: Lt. Gov. asked what can state do to aid development. Didn’t endorse, but he is following.

Council unanimous in adopting #6 as recommendation.

Allison: We will look at #7 with #1.

Hansen: Maybe we should talk about general funds first, funding of SERCC regardless of source.

Dayvault: If fund through general funding or SBC, which direction would you go?

Allison: What I’m hearing is that we might not adopt #1, but we may adopt funding for SERCC. Take #7 and modify that priorities to provide energy activity funding including SERCC.

Holloway: Have seen big numbers for energy plan kicked around, I’m concerned anyway you do it, need input from groups that are out there in industry that have different perspectives. I’m in favor of providing funding for this group to put on these meetings, as opposed to funding a full time office. Have staff where you don’t need to have these meetings anymore.

Allison: When we get into #13 and #14 — year long process to see how energy policy and planning works in the state. How meet current requirements.
Will come back to #7.

Allison reads #8.
#8- Develop and present a plan to increase the effectiveness of Kansas energy programs, through coordination and cooperation, for the eventual benefit of the State of KS. [Note: Important issues are being discussed in a number of different forums. There is a need to optimize the state energy program by identifying issues and groups/departments/councils and organizations that have an interest in and are working on them, to increase effectiveness and reduce redundancy.]

Holloway: How does this feed into new exec. Order? Governor is going to come out with some plans for SERCC. Seems odd that we would come out with energy policy when we don’t know what Governor is going to do.

Allison: Roll #14 into #8?

Wetzel: Take out effectiveness of energy programs of #8. Implies coordinated large scale programs.
Springe: There are so many other agencies that are doing energy programs.

Brosius: replace program with planning?

Phelps: Develop instead?

Snead: Develop and present a plan to coordinate and cooperation of energy related activities.

Allison: Looking at how energy policy in Kansas is currently being handled.

Brosius: First part is to get a handle on current energy activities, as first step to make recommendation .

Wetzel: Don’t think you can combine all the energy programs in agencies under one entity. We are talking about a program, an energy office that has a program, not everyone that does something energy related in Kansas together. #8 and #14 are not alike.

Snead: Is this inventory - #8, then a separate item, #14.

Allison: Inventory of energy related activities, with the aim of optimizing state energy program. How to increase their effectiveness, action item, by council. Would go to KCC and ask for Ploger for help with inventory. Lt. Gov very interested in seeing those, they are looking at inefficiencies and redundancy.

Recommendation #8 revised: Inventory of KS energy activities with the intent to improve coordination and cooperation, increase effectiveness, and reduce redundancy.

Council unanimous in adopting #8, revised, as recommendation.

Allison reads #9

#9-Endorse and support, to the extent possible, DSM and energy conservation. This could take the form of encouragement and public recognition of effective/important programs, or other actions, to be discussed.

Springe, Silver: Need to take out DSM.

Allison: Is this a feel good statement? The new Exec. order will include seats for conservation, when we get new charge, we will be given new action. Not sure what action SERCC would take. Conservation is in our plan.

Silver: Very close to #10.

Holloway: #10 is more focused.

Springe: Can change #9 to be focused more in recognition of awards, programs, like 10 has to support education. The awards language was there last year, still under that rubric, doesn’t need to be repeated.

Allison: We haven’t dealt with conservation as a priority in ’04, set up committee? Focus on conservation and efficiency?

Springe: Change focus – there was talk during gas summit, why aren’t there low interest programs for furnaces, etc. In terms of why doesn’t KS have a low interest loan program made available—action item as investigating different methodologies for providing consumers incentives to conserve. What is going on in the market.

Holloway: There are these things out there, people document who does what.

Springe: Change #9 to be more of an action item.

Phelps: why not roll #9 into #8

Silver: each are worthy of individual

Allison: If we take this as an action item reaffirming that conservation efficiencies is a goal, one of our first meetings in 04 would be major study item. We don’t know what it is , just a priority study item on how to move forward. How about we move #8 into study items, not action item, with language that would reaffirm that conservation and efficiency are lynch pins of our strategy, and that this topic would be a priority study item at one of our first meetings in 04.

Holloway: I move to adopt #10 and #11 and vote on these together.
#10-Endorse and support energy education for the general public, and K–12. Support education through media programs, and public awareness to the extent possible.

#11-Continue to support Transmission Task Force, review activities and conclusions, and make recommendations.

Council unanimous in adopting #10 and #11 as recommendations.

Allison reads #12
#12- Recommend that the State of Kansas take an active role in participating in proceedings before federal agencies when national issues will impact energy production and consumption in the State of Kansas. Maintain communication with members of the Kansas delegation to Congress.

Snead: Is this about who in state government speaks for the state in various venues about energy?

Korphage: Might be useful if you have a state energy planning body, coordinate information back to energy planning group.

Allison: Need to rewrite and roll into #8– inventory of federal agencies, groups outside of Kansas, regional, national?

Council unanimous in adopting #12 and incorporating it into #8. Will review language electronically.

Allison reads #14
#14- Develop recommendations for the formation of a state energy-policy-planning entity.

Wetzel: Premature because doing inventory of what is out there, #8—can’t develop entity without knowing what is out there.

Allison: May need to be done at same time. If we are not looking at how energy fits into the Gov. plan for natural resources (plan due out Dec. 1), will get sucked into ?

Holloway: Someone looking at plan would say that one of recommendation is to develop energy policy which is what the council was designed to do.

Brosius: #14 – not saying what it needs to say.

Phelps: Think good point that we do what #14 says

Silver: Accepting policy development and next step assignments using buddy system.

Allison: We are running out of time, getting new exec. order, may be different mission, different level of authority, maybe not ready for #14.

Wetzel: Is SERCC asking for authority to coordinate energy activities in state?

Holloway: Need to develop legislation.

Silver: Don’t think this group that meets for 16 hours a year can develop legislation.

Wetzel: Was #13 and #14 to get at funding an energy office with staff?

Allison: Is this council what we want Kansas energy office to be? Is this the best there is, do differently?

Snead: Are you trying to accomplish developing recommendations for energy policy? How to implement or administrate, organize, state energy policy?

Holloway: Not sure would put this group together and filter energy policy down through legislature, governor.

Wetzel: If this body doesn’t tell them, they don’t have the staff to tell them.

Snead: Legitimate to make recommendations for organizational changes for energy policy.

Council unanimous in adopting #14 as recommendation.

Allison reads #15:
#15- Work with Kansas congressional delegation, executive and legislative branches, utilities, and private sector to investigate the state’s potential with respect to the FutureGen project.

Council unanimous in adopting #15 as recommendation.

Allison: Can we combine #16 and #18 as study item?
#16- Review existing programs for Renewable Portfolio Standards (RPS)/Green Tags/Renewable Energy Credits in other regions and evaluate in light of KS needs and preferences. Recommend a preferred program.

Council unanimous in adopting #16 as recommendation.

Allison reads # 17:
#17- Develop a "roadmap" for KS Renewable Energy Development, including identification/discussion of pro's and con's. Identify and coordinate with other groups. Support development of responsible renewable energy development in KS as elements of responsible energy program, and reduction of state energy import requirements and the associated negative economic issues.

Wetzel: Will need manpower to do study.

Council unanimous in adopting #17 as recommendation.

Allison directs council back to proposed recommendation #1(Establish a systems benefit charge to fund an effective State energy program) and to the proposals brought forward by the ad hoc committee on an SBC.

Allison: I’d like to consider narrowing down the amount of charge to be 1/10 of a mill to produce smaller amount of money, focus on state energy planning efforts. As chair, I propose we amend the motion, treating proposal from renewables as forwarded, based on discussion this morning: part A – 1/10 of a mill, limit use of SBC in part C.

Holloway: Would rather have funds that empower, actually do something.

Springe: SERCC doesn’t have authority to employ someone, if create pool of money, FTE to KCC or KGS, form of consulting allocation to either one, SERCC can’t hire.

Holloway: Another piece of paper telling us we need to be doing something.

Springe: Lot of action items, lot of study items, develop way to do as consulting dollars through an agency.

Wetzel: Is SERCC going to become permanent with own staff?

Allison: Legislature would have to allocate to agency.

Holloway: Ask for limited funding to do this stuff from general funds this year. Can’t put detail and thought into for anything else this year.

Springe: Can do a budget, make a legislative action item for 2 FTE positions at KGS for strict purpose of [energy planning].

General discussion of feasibility of getting any general funding and of the need to move forward with some sort of SBC plan.

Allison: We do not have consensus to move forward with SBC, so I suggest putting #1 in study items. Add another action item – a proposal, recommending 2 FTE’s for SERCC.

Snead: Suggest request for $100K for action items.

Allison: We will draft something for $250K, $100K for action items, and 2 FTE’s. #1 will be study item.

[This recommendation will be circulated, along with revised language for recommendations #2 and #4 for council to vote on electronically.]

Allison proposes that the council adopt wind-energy siting guidelines, starting with the ones that renewable energy working group developed, as recommendation #19. This would be an action item for 2004.

Council unanimous in adopting #19 as recommendation.

Allison distributed information on Plains Organization for Wind Energy Resources (POWER).

Allison: I want you to look at this and we will get back in touch with you – have said we want to be observer, do not want to commit as partner.

Brosius: I will contact those involved with pieces of energy plan.

Allison: We will put draft together, prior to Christmas you will get draft.

Brosius: We will have draft to you by 22 Dec., you’ll have until Jan. 5 to get back to us with your comments, etc. This will give us a week to get to Governor, Legislature.

Adjourned 2:40 p.m.