Utility's re-evaluation of plans could alter push for coal plants in western Kansas

The Colorado-based utility looking to buy much of the power from two proposed Western Kansas coal plants is "re-evaluating its long-term resource planning."

That could be a deal-changer in the fight to build the plants near Holcomb. Kansas lawmakers have tried to resurrect the energy project ever since it was blocked by the administration of Gov. Kathleen Sebelius.

Hays-based Sunflower Electric Power Corp. wants to build the project and sell most of the energy to out-of-state utilities - the largest being Tri-State Generation and Transmission.

Late last week, Tri-State's board of directors announced the utility would re-evaluate its future plans and focus more heavily on renewables. At least part of this comes as a response to the continued coal fight in Kansas.

This is from Tri-State's website:

"Ongoing uncertainty in state and federal policies, and the economy, has prompted Tri-State to reevaluate the long-term resource plan it announced in 2005 that included options for new coal-based generating units. As part of its reevaluation, the association will review how coal-based resources fit into its long-term resource plans.

“'Significant changes in the regulatory climate and economy impact development projects and have disproportionately affected the near-term outlook for coal-based resources,” said (Tri-State executive vice president and general manager Ken) Anderson. “Part of our reevaluation process will review how coal-based resources fit into our long-term resource plans.'”

"Energy policy uncertainty affected the association’s proposed coal-based generation project in Kansas when a construction permit was denied for a plant in 2007. “'The delays in permitting the Kansas project make it unlikely to be available in the near-term. If a project is eventually permitted, it would remain an option for our long-term resource needs,” said Anderson

Tri-State's decision adds even more uncertainty to a debate that's been dominating Kansas politics for two years.

Right now, legislation to authorize the plants awaits a promised veto by Sebelius, a Democrat. Sunflower has hoped that the Legislature could overrule Sebelius and allow the plants to be built.

Many plant opponents - including Sebelius - have long predicted that the anemic credit markets, increasing Wall Street concern about climate change, and new federal regs could doom the project.

Earl Watkins, Sunflower’s President and CEO, commenting on the release said, “We understand that Tri-State has immediate needs for generation resources that have been hampered by the untimely delays in our Holcomb Expansion project. Sunflower and Mid-Kansas have the same concerns for the consumers served by our Member cooperatives.”

Sunflower CEO Earl Watkins responded with a statement vowing to "continue to fight."

Watkins blamed Tri-State's decision on Sebelius' rejection of the coal plants.

"We understand that Tri-State has immediate needs for generation resources that have been hampered by the untimely delays in our Holcomb Expansion project," he said. "...We have fought hard in the legislative process to return Kansas to a place with regulatory certainty where businesses can thrive. Unfortunately, a small minority have been successful in obstructing our cooperative efforts to build the cleanest coal plants in the nation."If this minority prevails, there is no question in my mind that electric prices will increase dramatically as a result of these policy choices that will not allow our Member’s customers access to clean, low-cost coal.”