The 5th meeting of the Interim Joint Committee on Agriculture and Natural Resources was held on Wednesday, November 8, 2006, at 1:00 PM, in Room 154 of the Capitol Annex. Senator Tom Jensen, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Tom Jensen, Co-Chair; Representatives Jim Gooch Jr, Co-Chair, and Thomas M McKee, Co-Chair; Senators Ernie Harris, Vernie McGaha, Ernesto Scorsone, and Damon Thayer; Representatives Royce W Adams, Adrian K Arnold, James E Bruce, Dwight D Butler, James R Comer Jr, Tim Couch, W Milward Dedman Jr, Mike Denham, C B Embry Jr, W Keith Hall, Charlie Hoffman, Reginald K Meeks, Brad Montell, Fred Nesler, Don R Pasley, Marie L Rader, Rick W Rand, Steven Rudy, Brandon D Smith, Jim Stewart III, Tommy Turner.
Guests: John Lyons and Lona Brewer, Kentucky Division of Air Quality; Sandy Gruzesky, Kentucky Division of Water; Sandy Williams, Kentucky Infrastructure Authority; Morgain Sprague and Jim Lane, Kentucky Department of Fish and Wildlife; and Bruce Williams, Kentucky Conservation Commission.
LRC Staff: Tanya Monsanto, Lowell Atchley, Biff Baker, Hank Marks, Clark Baird, and Kelly Blevins.
Sen. Jensen announced that a quorum was present and then asked for a motion to approve the minutes of the October meeting. After a motion and a second, the minutes were approved by voice vote. Sen. Jensen called on Sen. Thayer for a report of the Horse Farming Subcommittee.
Sen. Thayer stated that the subcommittee received testimony on the equine management internship program and on standard bred horses. There needs to be more venues for nonracing breeds. After a motion and a second, the report was approved by voice vote.
Sen. Jensen then asked representatives from the Division of Air Quality (DAQ) to give testimony about the Clean Air Interstate Rules (CAIR). Mr. John Lyons and Ms. Lona Brewer talked about the history of the Clean Air Act amendments and the various regulatory programs that were developed to reduce emissions of sulfur-dioxide (SO2), nitrogen-oxides (NOx), volatile organic compounds (VOCs) and mercury.
Mr. Lyons explained that most of these programs targeted emissions from stationary sources like utilities and large boilers. Out of these programs, new methods evolved for making flexible reductions such as the “cap and trade” program which allows for the emitters to purchase the right to emit pollutants in excess of the cap. The federal rules also changed over time by addressing different time frames for measuring emissions both in terms of hours and in terms of seasons.
The CAIR program is an attempt to create a multi-pollutant strategy. CAIR impacts 28 states on the eastern half of the United States. In Kentucky CAIR will impose new SO2 caps that will further reduce emissions. The same is true of the NOx allocations. Emissions will be cut to roughly 83 thousand tons. Currently there is only a seasonal NOx program, but CAIR will create a season and an annual program. Under CAIR states will also have the right to determine inclusion of non-electric generating units in the state implementation plan (SIP).
Rep. Denham asked how the NOx credits are allocated and is the program market driven? Ms. Brewer stated that currently there is a formula based on heat-input data from the most recent 3 years. Under CAIR the same formula will be used but based on 5 years of data. The program is market driven. There is a market for buying and selling credits.
Rep. Bruce asked why Christian county was in nonattainment. Ms. Brewer explained that those were older designations and now Christian county is in attainment.
Rep. Hall asked a series of questions. First, will DAQ talk to utilities about their plans to comply with the new federal rules? Second, are there repercussions for affected entities that exceed their caps? Finally, can the state locate new generation and still be in compliance with federal rules? Mr. Lyons stated that many utilities have already retrofitted scrubbers and should comply with the new rules without difficulty. There are no repercussions for exceedences per se, but the affected unit has to purchase the credits to emit more. Finally, yes Kentucky does have the ability to locate new electric generation and be in compliance.
Rep. Meeks asked about the relationship between DAQ and the Jefferson County Air Pollution Control District. Mr. Lyons stated that DAQ works closely with the air pollution control district and audits the monitoring program. However with respect to CAIR, the district has no responsibilities. Ms. Brewer stated that DAQ works with the districts when they are impacted by DAQs regulations.
Rep. Meeks asked whether Kentucky is impacted by the Indiana utility. Mr. Lyons stated that DAQ has not worked closely on the issue with Indiana. The control technologies used by plants, such as the one in Indiana, are business decisions of the company. We can get information about it to you. Rep. Meeks thanked Mr. Lyons and agreed that he would like to receive additional information.
Rep. Gooch asked if the United States Environmental Protection Agency (U.S. EPA) issues the credits to the states annually and when companies trade credits do those credits expire after a year. Ms. Brewer stated that Kentucky sells a certain proportion of credits now. Under the CAIR there will be 2 percent of the total number of credits received sold on the market. Companies trade credits and yes they expire after 1 year.
Sen. Jensen thanked the presenters and then asked representatives from the Kentucky Infrastructure Authority (KIA) and the Division of Water (DOW) to discuss waste water planning in Kentucky. Ms. Gruzesky with DOW talked about combined sewer overflows (CSOs) and their impact on rivers, streams, aquatic life, recreational use of waters, and drinking water. She stated that CSOs are discharges of untreated sewage prior to its arrival at the treatment plant. There are CSOs in several cities throughout Kentucky however the largest CSOs are in Jefferson county and in Northern Kentucky.
Then Ms. Gruzesky talked about the 1994 federal CSO policy when the DOW began issuing point source discharge permits to ensure enforcement. In April 2000, U.S. EPA issued an enforcement strategy after identifying CSOs and sanitary sewer overflows (SSOs) as a top priority and then began issuing enforcement actions. Then, Ms. Gruzesky discussed the orders of compliance filed in Northern Kentucky Sanitation District 1 and in Jefferson County Metropolitan Sewer District (MSD). Finally, Ms. Gruzesky discussed compliance assistance offered by the cabinet. There are early action components, Ms. Gruzesky explained, and long-term plans for dealing with CSOs and SSOs. The cabinet is offering training and workshops. There is also a funding component from the clean water state revolving assistance fund. Right now, DOW is examining project lists and streamlining the environmental and technical review components to make it easier.
Then, Ms. Sandy Williams with KIA discussed the role between KIA and DOW. We jointly administer the funds, Ms. Williams stated. Federal grant monies have a state match requirement. KIA finances water and waste water projects, but KIA also finances other projects like broadband and dams. Then Ms. Williams described the various loan and grant programs at KIA and how KIA is trying to improve effectiveness in the use of those grant and loan dollars.
Ms. Williams described the goals of KIA as advancing public health, protecting water bodies, addressing water quality priorities and administering funds. There are check lists for the funds and KIA wants to optimize the program and clarify the agency jurisdictions and responsibilities. We are creating a borrower outreach program to help them with problems. KIA is also studying staffing needs to make the program run better.
Rep. Gooch asked how KIA will address repairs needed in existing infrastructure that was built under the Works Progress Administration (WPA) program in numerous communities throughout Kentucky. Ms. Williams replied that this question has not been directly addressed by KIA, but the federal level is examining the question of sustainable infrastructure. There is no answer yet.
Rep. Denham asked for an update on the eleven CSOs in Maysville. Ms. Gruzesky stated that DOW has had 3 or 4 meetings with authorities in Maysville. DOW will provide them with a first draft of an agreement.
Rep. Nesler asked what DOW and KIA are doing to encourage the consolidation of water districts. Are there grant programs to encourage consolidation? Ms. Williams explained that KIA works with the water councils and tries to encourage mergers through ranking projects and promoting regional projects. However, KIA doesn’t have the authority to compel mergers and sometimes for various reasons water districts do not desire to consolidate.
Rep. Nesler furthered that some districts are not doing very well. Can you mandate them to consolidate? Ms. Gruzesky stated no. We cannot mandate it. We highly encourage it, but have no authority to mandate mergers or consolidations.
Rep. Nesler continued that he sensed the cabinet is aware of the need for consolidation. Specifically, are there grants that encourage mergers? Ms. Williams replied no. There are no grants for that specific purpose.
Rep. McKee asked if a decree had been filed in Campbell county. Also why is it 15 years normally before a district is required to be in compliance? This seems like a problem. Ms. Gruzesky explained that when a state sets a final compliance date, it does not preclude activities occurring earlier to address the CSOs. Those communities will have to submit early action plans. However, some systems are very old and need to be changed. They may need to install new monitoring systems and determine rain events that impact them. This all takes time and money.
Rep. Meeks asked about the genesis of the CSO problems in Jefferson county. What was the precipitating event that led to all the controversy with MSD? Ms. Gruzesky stated that MSD has had a lot of history. The final control plan for MSD is due in 2008. U.S. EPA’s notice of CSOs as a problem let to greater scrutiny of MSD.
Rep. Meeks continued by asking whether the cabinet knew about a place called “Dreamland.” Ms. Gruzesky stated yes that she had heard of Dreamland but did not have details about problems there.
Sen. Jensen thanked everyone for attending the meeting on the day after the elections and then announced that the next meeting would be December 7, 2006. After a motion and a second, the meeting adjourned by voice vote.