Politics & Government

‘Significant interest’ remains in new Kansas coal power plant, utility told regulators

Plans to build a new coal-fired power plant in Kansas — for years considered effectively dead — are actually still alive. For now.

The battle over the proposed plant in western Kansas lasted for more than a decade after Gov. Kathleen Sebelius blocked it on air pollution grounds. By the time the Kansas Supreme Court cleared the way for construction in 2017, one company involved called the chances that it would happen “remote.”

But documents obtained by The Kansas City Star and Wichita Eagle show that the utility spearheading the project told state regulators “significant interest” remains in building the plant.

A new coal-fired plant in Kansas, which has become a wind energy leader — the state receives 36 percent of its electricity from wind, more than any other state — would be an extraordinary development. No new facilities have been brought online in the U.S. since 2015 and there are none under construction.

Sunflower Electric Power Corporation asked for an 18-month extension of a key permit “to finalize the arrangements that would support its construction,” according to the formal request it sent to the state. The Kansas Department of Health and Environment (KDHE) renewed the permit until March 2020.

The coal plant, called Holcomb 2, could prove an economic boon to western Kansas if it ever moves forward, bringing jobs to the area, proponents say. Sunflower Electric already operates one plant near Holcomb and the project calls for an adjacent $2.2 billion, 895-megawatt facility.

But environmentalists have strenuously objected to the project, pointing to greenhouse gas emissions that contribute to climate change.

The economics of coal power have grown more tenuous in the years since the plant was first proposed. Federal regulations that change depending on whether a Democrat or Republican holds the White House have contributed to an atmosphere of uncertainty that causes companies to think twice about building or expanding such facilities.

In 2010, the United States added 5,879 megawatts of new coal-fired electric capacity, according to Global Energy Monitor, which collects data on fossil fuel use. By 2016, the number fell to zero and has stayed there since.

Increased use of natural gas and the implementation of long-delayed regulations of coal plants have made coal less competitive, said Christine Shearer, Global Energy Monitor’s coal program director. Solar and wind energy are also becoming more cost-effective when compared to coal.

“So it’s really been like a one-two-three punch that have made it hard for coal to compete,” Shearer said.

Zack Pistora, a lobbyist for the Kansas Sierra Club, expressed alarm at the possibility the plant could still move forward. Kansas needs to use energy that doesn’t pollute the air with greenhouse gases, he said.

“Environmentally, we’re at the point where (coal is) an outdated form of energy,” Pistora said.

Sunflower Electric, based in Hays, this week didn’t rule anything in or out. Its partner, Tri-State Generation and Transmission Association, didn’t respond to a request for comment.

“Sunflower and our project partner continue to explore project options. Neither Sunflower nor Tri-State will advance the project unless it is determined that the expansion remains in the best interest of our members,” Sunflower Electric spokeswoman Cindy Hertel said in a statement.

The two companies, who have together invested more than $100 million so far, are running out of time. The permit extension will expire next March 27.

When it approved the extension, KDHE said in a written order that it would not give Sunflower Electric and Tri-State, based in Colorado, any additional time.

“If Permitee fails to commence construction of Holcomb 2 by the end of the second extension, the permit shall lapse,” the order said.

If the permit expires, it will cap a process that divided the state for years.

Sebelius opposed plans for the coal plant near Holcomb, outside of Garden City in Finney County. In 2007, KDHE cited the threat of global warming and denied Sunflower Electric the permits it needed. Coming from a conservative state, the denial was stunning and attracted national attention.

Sebelius’ successor, Mark Parkinson, struck a deal with Sunflower Electric to allow construction in exchange for a greater emphasis on renewable energy by lawmakers and promises by the company to reduce emissions.

Court fights held up construction for years. In March 2017, the Kansas Supreme Court gave the final OK for Sunflower to move forward.

But by then – after a decade of uncertainty – the project seemed in doubt. In an August 2017 filing with the federal Securities and Exchange Commission, Tri-State said it “assessed the probability of us entering into construction for the Holcomb Expansion as remote.”

For many, that essentially marked the end of the saga. Very little has been said publicly about the project in the two years since.

In requesting a permit extension, Sunflower Electric acknowledged both it and Tri-State no longer need the electricity that would be produced by a new coal plant. The company wrote that since the 2017 Supreme Court decision it has been looking for others to purchase power from the plant.

KDHE said in response that Sunflower has had to contend with “the dramatically increased use of renewable energy sources.”

“I’m not sure that the business model can be made for increasing more generation through coal. It’s a pretty expensive proposition to get into it,” Rep. Russell Jennings, a Republican who represents Holcomb, said.

Lona DuVall, president and CEO of the Finney County Economic Development Corporation, said Sunflower Electric has given no sign it plans to move forward. She also said the utility has never definitively ruled out construction, either.

“When this first came up and it was being pursued, I think the entire area was excited about the opportunity,” DuVall said.

Large construction projects are always good for the economy, she said. Sunflower Electric is a “tremendous employer” and the new jobs would have been welcomed.

“But, honestly, this far past it we’ve done a lot of other projects and we’ve had a lot of other growth, fortunately,” she said. “We didn’t just wait and hope one project would happen.”

Sen. John Doll, a Garden City Republican, said he wants what Sunflower Electric wants. Still, the excitement the project generated in 2005 and 2006 has faded, he contends.

“It’s been real disappointing to me,” Doll said. “But you’ve got to keep moving forward.”

Related stories from Wichita Eagle

Jonathan Shorman covers Kansas politics and the Legislature for The Wichita Eagle and The Kansas City Star. He’s been covering politics for six years, first in Missouri and now in Kansas. He holds a journalism degree from the University of Kansas.