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Posted on Dec. 28, 2006
By JOHN HANNA
© 2006 The Associated Press
Decision on New Westar Plant Delayed
TOPEKA, Kan. — Westar Energy Inc. postponed a decision on where to build a new coal-fired electricity plant in Kansas, saying Thursday that higher cost estimates mean it may not be the cheapest way to meet future demands for power.
The utility planned to pick a site by the end of the year, and spokeswoman Gina Penzig said the company narrowed the number of potential sites to fewer than 10.
There's no new timetable for picking or beginning construction, though the company said previously it hoped to have the new plant online by 2015.
When Topeka-based Westar announced its plans in May 2005, it estimated the cost of building the new plant at $1 billion. That projected cost has now up to $1.4 billion, and Westar Chief Executive Jim Haines said the company needs to move cautiously.
"When we started this process over a year ago, the lowest-cost means to satisfy these needs was with a coal-fueled power plant," he said in a written statement. "That assumption does not necessarily remain valid."
Westar is the state's largest electric company, with 667,000 customers. It also plans to build two natural gas-fired generating units at an estimated cost of $318 million, to provide electricity when demand peaks.
The utility's decision to postpone its site search for the coal-fired plant comes amid an ongoing debate about plans by Sunflower Electric Power Corp. to build three coal-fired plants.
Sunflower is seeking a state air-quality permit for its project and has met with opposition from environmentalists and others concerned that new coal-fired plants would contribute to global warming and increase pollution. The state Department of Health and Environment hasn't decided whether to issue the permit.
Charles Benjamin, attorney and lobbyist for the Sierra Club's state chapter, said there has been similar criticism of a plan by Kansas City Power and Light Co. to build a new coal-fired plant in northwest Missouri. He said utilities across the nation have proposed more than 150 coal-fired plants.
Penzig said Westar's plans weren't influenced by the debate surrounding Sunflower's project.
"The decision was based on the economics of the project," she said. "Absent any controversies surrounding the Sunflower project, we would have still reached the same conclusion."
Westar's plans call for building a 600-megawatt coal-fired plant, which would increase its total generating capacity by almost 10 percent. The utility's coal-fired plants currently provide more than half of its 6,185 megawatts of generating capacity.
Benjamin said Westar's problems with rising cost are compounded by the difficulty it faces getting equipment, supplies and workers. Because so many coal plants are being planned nationwide, they are all in short supply, he said.
He said Westar should aggressively pursue wind energy and decrease the overall demand for electricity by promoting conservation among its customers.
"It basically validates what a lot of us have been predicting for some time: that new coal plants are not the least expensive way to go to generate new electricity," Benjamin said.
Westar shares fell 48 cents to close at $26.32 on the New York Stock Exchange.
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