NCSL Advanced Coal Technologies Energy Institute
Tampa, Florida — October 31- November 2, 2007
Notes from Friday's Facilitated Session
Top Tier Idea Identification
A. Infrastructure
a. Utilize the Wyoming Pipeline Authority (WPA) model for building of CO2 pipelines from sources to sinks.
b. Utilize the Wyoming Infrastructure Authority (WIA) model for getting electricity from advanced coal facilities
to market.
i. This model in different functions also has been duplicated in WY, ND, KS, and OK.
B. Cost Recovery
a. Expand the Public Utility Commission/Public Service Commission (PUC) decision making criteria.
i. Consider externalities
ii. Redefined PUC authority
b. Prevent PUC “look-back”
i. “No look back for prudency legislation”
ii. Provide for built-in accountability
c. Tax incentive examples
i. Long-term property tax exemption
ii. Sales tax exemption on appropriate purchases
iii. Authorize a higher rate of return through the commission
d. Construction Work in Progress (CWIP)
i. Help to reduce costs during construction
C. Regulatory and Statutory
a. Define CO2 as a commodity (vs. waste)
i. Implies that CO2 has a positive value
ii. Value defined by the market
iii. Use the market value in determinations of cost recovery
b. Assessment of each state’s statutes and regulations
i. Example: New Mexico Interim Report on Identified Statutory and Regulatory Issues
c. Tax incentives
i. For advanced coal technologies
ii. For projects that increase efficiency
iii. Carbon capture and storage
iv. Incentivize IGCC plants that are capture ready with further incentives for actual capture and
storage
d. Define permitting process
i. Direct PUC to determine regulatory process for permitting
D. Research, Development and Demonstration
a. Increase resources for RD&D to commercialize
i. Research centers
ii. University systems
iii. Possibly through grants from oil and coal severance taxes
b. Collaboration with other states
i. States are inherently provincial, but each has their strengths and weaknesses to draw on.
ii. Collaboration between states can help impact the federal government response.
c. Continue to gather and disperse information to state
i. NCSL can help gather information in one place
ii. NCSL can provide professional development to legislators
E. Ratepayer Education and Outreach (industrial, households, etc.)
a. Sense of urgency to educate: spread to legislators and the public
b. Public relations efforts to help with outreach (PR & marketing)
i. Bring diverse groups together to put out a similarly framed message including:
1. Utilities and the coal industry
2. Environmental groups
3. Legislators
4. Regulators
5. Agriculture
6. Industry
c. Put energy on the front burner
i. “Pay more now or pay a lot more later”
ii. Meet demands of the future now
d. Education efforts
i. K-12 education and outreach
1. Where energy comes from
2. How it gets to your house
3. What is does once it is there
ii. Educate the states, the legislatures, regulators about the issues and about advanced coal
technologies in order to help legislators move legislation.
F. Inter and Intra Governmental Education and Collaboration (legislators, governors, regulators, etc. across
jurisdictions)
a. Bring the PUCs into the discussion with legislators
b. Bring others into the discussion
i. Environmental community
ii. Agriculture
iii. Attorney Generals Office
c. Outreach to local governments
d. Power producers
e. The public in general
f. Issues for discussion
i. The alternative to doing nothing?
ii. Educate rate-payers on why pay more for power
g. Assistance needed with:
i. Sample legislation for advanced coal technologies
1. Indiana’s legislation is a good example
ii. Provide a database to track existing legislation
iii. Provision of educational materials for different levels of interest
iv. Coordinate with the executive branches which have the ways and means to reach the public in
public benefit educational campaigns.
Notes from individual groups
Question One: What are the specific legislative options and other strategies for addressing the issue identified?
Question Two: What assistance do you need to develop legislative solutions in this area? How could groups like the NCSL and its partner organizations support you in your efforts?
A. Infrastructure-Facilitated by Mike Gregerson
a. Question One:
i. Pipeline Case-Wyoming pipeline authority
1. Utilizes a severance tax
2. Issue of funding pipelines beyond state borders
ii. Transmission case-Wyoming Infrastructure Authority
1. Industrial road fund-original intent was to help from “Farm to Market”
2. The state helps to pay for this infrastructure and this could be used as a model for
transmission getting “Electricity to Market”
3. Includes match from appropriate:
a. Counties
b. Developers
b. Question Two:
i. A summary of positions of what other states have done in the area would be valuable for
comparison.
B. Cost Recovery-Facilitated by Eric Schroeder
a. Question One:
i. Show rate payers stability of future rates
ii. Show advanced coal technology development as economic development
iii. Utilitize a life cycle cost view
iv. Utilize a least cost within the technology approach
v. Broaden the scope of public service commissions/public utility commission beyond current the
least-cost criteria.
1. Life cycle operating cost estimates that include anticipated environmental and political
externalities.
vi. Help get the non-compliant coal out of the ground
vii. Set up zone of advanced coal technologies plants and sell the electricity on a power purchase
agreement basis. Emphasis:
1. Mine mouth
2. Education and Jobs
3. Geographic dispersion of generation
viii. No look-back for prudency legislation
1. Prevent PUCs from “looking back” to retroactively address cost recovery if technology
does no perform as well as hoped.
2. These issues are new and the “prudent” decision is not the same.
3. Provide for built-in accountability
ix. Add basis points to PUC rate of return for advanced coal technologies.
x. State bonding authority for emission control technology to reduce borrowing costs.
xi. Require PUCs to approve advance coal plants with carbon capture
1. Pass the costs to all rate payers (with tax credits to high industrial users).
xii. Tax incentives:
1. Long term property tax abatement
2. Income tax break
3. Accelerated depreciation rate
4. Sales tax exemption
5. Investment tax credit
6. Production tax credit
xiiii. Pre-approval by PUC for projects
xiv. Construction work in progress cost recovery
xv. Question of how do rural electric cooperatives and municipalities get some of the cost recovery
mechanisms.
xvi. Utility companies in a state must support advanced coal technology initiatives.
xvii. Utility and supplier financial support could be utilized for more workshops on advance coal
technologies.
b. Question Two:
i. PUC commissioners, PUC staff, governors or governor’s staffs need to be at advanced coal
technology workshops or bring the workshops to them.
ii. Develop arguments for use in response to rate increases hurting industry and low-income
customers.
C. Regulatory & Statutory-Facilitated by Jennifer Johnson
a. Question One:
i. Define CO2 as a commodity (not waste)
1. Define anthropogenically generated and captured carbon as a commodity at the state
and federal level. States need to be proactive in moving this forward. This will assist
regulators and will create certainty.
2. Implies that CO2 has a positive value
3. Value defined by the market
4. Use the market value in determinations of cost recovery
ii. Tax incentives
1. For capture ready projects and for projects that are demonstrating carbon
capture and/or sequestration
2. Reduction of the severance tax for projects using anthropogenically created CO2
(example, Texas H.B. 3431)
3. As outlined in the IOGCC report
4. For projects that increase plant efficiencies
5. For advanced coal technologies
6. Incentivize IGCC plants that are capture ready with further incentives for actual
capture and storage
iii. Define permitting process
1. Identify the appropriate agency and process for permitting carbon capture and storage
projects
2. Identify the unique issues arising from interstate transmission of power and how to
develop regulatory certainty
3. Maintain the regulation of electricity generation in states that are already regulated
b. Question Two:
i. Conduct state assessments of existing statutes related to carbon capture and storage, including
analogous statutes from other sectors (such as natural gas and oil).
1. A first step in the development of legislation addressing the statutory and regulatory
issues related to carbon capture and sequestration.
2. A first step in applying model legislation, such as the IOGCC proposed rules and
regulations, in order to ensure consistency with the unique statutory and regulatory
frameworks of each state.
3. Examples of state assessments:
a. New Mexico Interim Report on Identified Statutory and Regulatory Issues
b. Wyoming Joint Judiciary Committee Report
ii. Include carbon capture and storage technologies in an alternative fuels standard
D. Research, Development and Demonstration-Facilitated by Kristy Monk
a. Question One:
i. Legislator could set aside more money
1. Competitive grants
2. Possible collaboration with other states to increase grant money for targeted investment
a. Carbon Capture and Storage
3. Montana has a trust fund from coal taxes
a. Most is earmarked to coal communities
4. Alberta uses a tax on tar sands to fund research and development
ii. Commission a study from a university to research economic development around CCS projects
iii. Utilize existing university research better
iv. EPRI is putting together a study on use for green house gases
v. Initiative to do demonstrations in a collaborative effort
vi. Special coal tax earmarked for research and development
vii. Pushing through demonstrations may not need to have all the infrastructure requirements in
place.
viii. States approach the federal government for money for demonstration projects.
ix. Workforce education
1. Technical colleges to develop new projects and programs that will support the industry
x. Develop a model statute to release liability for reseach and development
1. Trust fund
2. Commission the research and development on a federal site
xi. Provincialism needs to be dealt with because each state is different.
b. Question Two:
i. NCSL can help organize states to approach the federal government together.
ii. Put together a list of statutes or model legislation
iii. Workforce statute pushing education for:
1. Technical colleges
2. Scholarships
iv. Networking groups around
1. Gasification
2. CCS
v. Gather and disperse information to legislators on what is going on in the energy arena.
vi. More Energy Institutes for legislators.
vii. There is a worry that states will go in a different direction
viii. Some people don’t believe that advanced coal technologies are needed for various reasons.
ix. Help in developing regional workgroups
E. Ratepayer Education and Outreach (industrial, households, etc.)-Facilitated by Courtney Welch
a. Question One:
i. Sense of urgency to educate: spread to legislators and the public
ii. Putting energy on the front burner
1. “Pay more now or pay a lot more later”
2. Meet demands of the future now
b. Question Two:
i. Public relations efforts to help with outreach (PR & marketing)
1. Bring diverse groups together to put out a similarly framed message including:
a. Utilities and the coal industry
b. Environmental groups
c. Legislators
d. Regulators
e. Agriculture
f. Industry
ii. Education efforts
1. K-12 education and outreach
a. Where energy comes from
b. How it gets to your house
c. What is does once it is there
2. Utilize the existing Joyce Foundation educational structure to launch similar efforts.
3. Educate the states, the legislatures, regulators about the issues and about advanced
coal technologies in order to help legislators move legislation.
F. Inter and Intra Governmental Education and Collaboration (legislators, governors, regulators, etc. across jurisdictions)-
Facilitated by Kate Marks
a. Question One:
i. Involvement and coordination
1. If legislation is being considered, ensure that other agencies and groups are involved
and included like:
a. Utilities
b. Regulators
c. Environmental community
d. Attorney Generals office
e. Agriculture department
f. Local government
g. The public at large
ii. Education
1. Don’t only cover what the process is and how things work, but also what might happen
if the state doesn’t act or work to adopt advanced coal legislation (from an economic
perspective)-this would have a big impact in states like West Virginia.
b. Question Two:
i. Model/Sample legislation
ii. Educational materials
1. Why this is important
2. Options
iii. Legislation tracking database
iv. Share relevant legislation with other states
v. Varying levels of knowledge regarding this issue within legislatures
1. Different types of information would be needed for different levels of understanding.
vi. Executive agencies can reach the public.
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