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January 08, 2014

The New Year Brings New Wind Energy to the Midwest

Wind-turbines

Today, Kansas City Power & Light (KCP&L), a utility that serves over 800,000 customers in Kansas and Missouri, announced that it will nearly double its existing wind portfolio with the purchase of 400 megawatts (MW) of power from facilities located in both Kansas and Missouri.

EDP Renewables will construct and operate the first facility in Waverly, Kansas, while Element Power will build and manage the second site in Holt County, Missouri. Expected to be operational by the end of 2015, each facility will be capable of producing up to 200 MW of electricity. KCP&L will purchase power from these wind farms via 20-year power purchase agreements that will be cheaper than purchasing power from other sources. In fact, KCP&L estimates that this wind energy purchase will save its customers approximately $600 million over the lifetime of the agreements. KCP&L's wind energy purchase puts the utility on par with other Midwestern utilities that are investing in wind and saving customers money. [Note: A recent report from the Department of Energy describes downward-trending wind prices and skyrocketing demand, noting that in 2012, wind was the largest source of new electrical generation capacity in the United States.]

So, how did this happen? In 2007, the Sierra Club and Concerned Citizens of Platte County entered into a settlement agreement with KCP&L where we agreed to drop legal challenges concerning the Iatan coal-fired power plant in exchange for, among other things, the utility's procurement of 400 MW of wind-generated electric power by December 31, 2012. By the end of 2012, KCP&L had come up short on its promise, so we sent the utility a demand letter indicating our intent to sue over breach of contract. KCP&L took these allegations seriously and respectfully, and we commenced a series of very productive conversations about the need to comply with the legal agreement that the parties had negotiated in good faith, as well as the incredible value that wind energy can bring to a utility like KCP&L.

With the procurement of 400 MW of new wind, KCP&L will power past its original obligations under our settlement, resulting in a net win for the climate and the utility's customers. Unfortunately, Missouri's wind energy portfolio currently lags behind neighboring states like Illinois and Iowa, which hold nearly eight and eleven times more installed wind capacity, respectively. Still, we commend KCP&L for its efforts here, which are in stark contrast to those of Ameren Missouri, the state's largest electric utility. Today's announcement will bring KCP&L's total wind energy portfolio to 939 MW, making it a clear leader in both Kansas and Missouri, and over nine times larger than Ameren Missouri's 102 MW wind portfolio.

KCP&L's announcement is a refreshing way to ring in the New Year, particularly for the state of Missouri, which generated over 80 percent of its electricity from coal-fired power plants in 2011, the most recent year for which data is available. In 2014, we will continue to push both Ameren and KCP&L to invest in clean, renewable energy while we simultaneously advocate for a timely and responsible phase-out of the utilities' oldest and dirtiest coal-fired power plants.

Sunil Bector is an attorney with the Sierra Club.


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