Great Plains Energy puts second coal-fired power plant on back burner
The Kansas City Star, Mo. - July 2, 2003
Great Plains Energy Inc. would build only one of two proposed coal-fired power plants, while pushing wind power and energy conservation projects, under a revised plan.
On Thursday, the company's two top officials backed off the original plan.
They said that only one of the plants was "on the table" and that the
Missouri site was the preferred location.
"We are interested in one unit," said Michael Chesser, chief
executive officer of Great Plains. "It could well be this is the last
coal-fired plant to be built in the region."
The company is also proposing to speed up the retrofit of two existing power
plants -- La Cygne1 and Iatan -- to reduce pollution emissions. One result: The
proposed coal-fired plant and the adjacent Iatan facility would produce less
pollution than Iatan currently emits alone, according to Great Plains.
The plan also calls for stepping up efforts to generate electricity from wind
energy, which the company currently doesn't do.
William Downey, president of Great Plains, said sites in northeast Kansas and
northwest Missouri were being looked at for a 200-megawatt wind farm. That could
provide power to 160,000 homes.
The two company officials said in an interview that none of the plan's
components is certain until public input has been gathered and regulators review
the proposal. Regulatory workshops will also be held in Missouri and Kansas
beginning next month.
Charles Benjamin, an attorney and lobbyist for the Kansas chapter of the
Sierra Club, said it appears that Great Plains is using the power plant upgrades
and wind power to curry public support for a new plant.
"It shouldn't be a quid pro quo," Benjamin said. "They ought
to upgrade their existing plants so they are less harmful to the environment and
to people. They ought to be looking at and promoting wind power, which is the
wave of the future, and hold off on a decision on whether they really need to
build a new coal-fired plant."
Chesser said the company is offering a balanced portfolio that would meet the
region's needs for power, allow the company to continue to offer low-cost
electricity and reduce pollution in the area.
"This is a starting point for discussion we would like to put
forward," Chesser said. "We think this is a pretty attractive
package."
He said that the company expects demand for electricity to increase 2 percent
to 3 percent per year, and that the proposed 850-megawatt coal-fired plant would
be a valuable part of the package. There are no plans to build the other
proposed plant, although the company will continue to seek the necessary permits
for the second site.
One reason for building only one new power plant is the enormous investment
involved, which with retrofits of existing plants will be more than $1 billion.
The plan calls for the new plant to be regulated and serve its utility customers
-- not a purely unregulated plant to supply the wholesale power market. It
remains unclear how much of that investment would be financed by customers.
The company is talking with partners for the plant to share the expense. If
the plan for the plant is favorably received, Great Plains hopes to begin
construction next year. Construction would take about four years, plus time to
have the boiler built.
The company would spend about $300 million to $350 million to retrofit the La
Cygne power plant in Kansas and its existing Iatan plant. The retrofit was
included after a suggestion at a recent public forum, Chesser said.
The plan also seeks to reduce demand for power by encouraging customers to be
more energy efficient, such as by using high-efficiency air conditioners for
office buildings. Another possibility is offering rebates or low-cost financing
for ground-source heat pumps, which are more efficient than other heat pumps but
also more costly to supply.
Regulatory workshops next month could give the company some indication of
whether state regulators are agreeable to the plan.
But Bob Schallenberg, head of the utility services division at the Missouri
Public Service Commission, said that the idea of the workshops to review such
plans is without precedent and that the outcome remains unclear.
"We're not sure," he said.
Melissa Blakley, a member of the Ozark chapter of the Sierra Club in
Missouri, said power plant opponents are enthusiastic that Great Plains is
considering producing energy from sources other than coal-fired power plants,
such as wind, and planning to promote energy-efficient technology.
"I think generally we are thrilled they have come as far as they have
come," Blakley said. "We are particularly thrilled with their plans
for wind efficiency."
But she said opponents still don't think that Great Plains needs to build
another power plant. In fact, she argued that the growth rate for energy demand
in the region is less than what Great Plains has projected. The company has
promised to provide its data.
"We believe coal is a 19th century technology, and if we allow them to
build this power plant, then we are socked into 19th century technology,"
Blakley said.
Two federal incentives could help push the company to move forward on wind
energy, energy-efficiency programs and pollution control.
One incentive, a tax credit on developing wind energy, died last year but has
been resurrected this year in the controversial energy bill in Congress.
In addition, the Bush administration said Wednesday that it is taking another
look at another exemption.
Until last August, any power plant that upgraded its pollution equipment had
to install the latest technology to control pollution emissions. Because of
pressure from environmentalists, the Environmental Protection Agency said it
will reconsider the exemption, according to news reports.
Currently the company is holding public forums to discuss the plans.
Blakley was critical of what she called a "scare tactic" that Great
Plains is using to explain to the public the need to build the power plant.
"The employees all had a key line, 'You don't want to run out of
electricity, do you?'" Blakley said. "'If we don't build a power plant
your lights are going to go out.'"
The announcement comes in time for Great Plains' portfolio to be part of a
discussion about the region's air quality.
The Kansas City region is expected to violate the federal government's air
quality standards on ozone in August. Power plant emissions, especially nitrogen
oxide, are considered to be contributors to ozone.
An air quality group is currently analyzing a computer model of the area's
ozone plumes to determine the sources. A forum in late August or early September
is expected to determine how the region should respond if it is found to violate
federal law. Great Plains and its plans will be a consideration, said James
Joerke, air quality program manager at the Mid-America Regional Council.
"It's definitely a good thing," Joerke said. "There's no
question about that. The more pollutants we can remove from the air we are
breathing, the more that helps us out."
By Steve Everly and Karen Dillon
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