A day before Gov. Sam Brownback's renewable energy summit, BP Wind Energy officials unveiled plans to build Kansas' biggest wind farm.
At a Monday news conference at Wichita State University's Hughes Metropolitan Complex, BP said it planned to build an $800 million, 419-megawatt capacity wind farm sprawling across 66,000 acres in Harper, Barber, Kingman and Sumner counties.
Construction on the project, named the Flat Ridge 2 wind farm, is slated to start this year and be completed by fall 2012.
It will produce 500 construction jobs and 30 operations jobs, once the project is complete.
BP will pay more than $1 million a year for 20 years to the 200 landowners hosting the turbines and about the same amount to the local governments.
Brownback has touted wind and other alternative energies as one of the state's best economic development opportunities.
He will kick off a two-day summit on alternative energy this morning at the Hyatt Regency Wichita downtown. The gathering will focus on growth and development of renewable energy, traditional energy and utility transmission.
"I love wind energy. It's a fabulous industry that fits our state well," Brownback told the audience of company executives and state and county officials.
The project is strongly welcomed by the four counties hosting the wind farm.
"Economically, it's very significant," said Carol Voran, a county commissioner in Kingman County.
The financial impact of the lease payments and the jobs will be sizable in a sparsely populated county, she said.
John Graham, CEO of BP Wind Energy, said Kansas is a natural place to build because it has plenty of wind and a pro-wind business climate.
Because three quarters of the electricity from the project will be sold to Springfield, Mo.-based Associated Electric Cooperative, BP can be seen as another exporter in a state noted for its exporting companies.
"In addition to exporting wheat and beef, oil and natural gas and airplanes, Kansas is now adding wind power to its list of exports," Graham said.
And, he said he looked forward to working with Kansas for future wind projects.
Roger Clark, director of engineering and operations for Associated Electric Cooperative, said that part of what drove the utility's decision to agree to buy the power from BP was the possible expiration of the federal Production Tax Credit (PTC) at the end of 2012.
Keeping the tax credit, which has been targeted by many tax-cutting conservatives in Congress, is critical to spurring new wind farms in Kansas, Brownback said.
"It really buys down the price of the wind power," Brownback said of the tax credit. "Associated is very wise in buying wind energy now because of the pressure on the federal budget, and the PTC is under pressure. It's key for the state of Kansas if we want to continue to develop wind energy."
Graham said costs and prices of wind energy are dropping as the scale of the industry grows and technology improves.
But, it's not competitive yet, Graham said.
"There's a sort of cliff that we fall off at the end of 2012," Graham said. "With the expiration of the PTC there is likely no wind development in 2013."
If the tax credit expires, he expects the industry to pull back for a few years to re-assess what it can build at the market prices.
BP, which will own and operate the 262 1.6-megawatt GE-built turbines, is trying to find buyers for the rest of the power in the Midwest. It also operates the Flat Ridge 1 wind farm in Barber County — about 60 miles southwest of Wichita — which generates 50 megawatts through 20 wind turbines.
According to the Kansas Energy Information Network, there are nine operating wind farms in Kansas, with one — Caney River in Elk County — under construction.
The largest of those wind farms is the 204-megawatt Meridian Way farm in Cloud County, according to the information network.
"We've got such big scale wind in Kansas, you can build virtually any size you want," Brownback said Monday. "We've got the space and the wind."