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Released March 19, 2014 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Kansas City Power & Light Company (KCP&L) (Kansas City, Missouri), a unit of Great Plains Energy Incorporated (NYSE:GXP) (Kansas City, Missouri), signed power purchase agreements (PPAs) with two windfarm developers for 400 megawatts (MW) of new wind generation that is scheduled to come online by the end of 2016.
KCP&L also wants to invest more than $29 million in its existing energy-efficiency programs, which would generate an estimated $400 million in total customer benefits over the next 20 years, KCP&L spokesperson Rebecca Galati told Industrial Info. "The total benefits estimation refers to the amount all customers will save by KCP&L offering these programs, even if they don't participate," she added. The Missouri Public Service Commission (MPSC) (Jefferson City, Missouri) will decide by May whether KCP&L will be allowed to expand its efficiency program.
Galati said purchasing wind power from the two windfarms under development would save KCP&L customers an additional $600 million over the contracts' 20-year lifespans. The utility, which provides electric service to more than 800,000 customers in northwest Missouri and eastern Kansas, has not made any decisions about retiring coal-fired generators in response to tighter federal environmental regulations.
"Taken as whole, our proposed investments in efficiency and wind power will help us meet customer needs for about $1 billion less than what we would pay if we didn't have those wind and efficiency resources," Galati said.
"These investments continue our commitment to move toward a more sustainable energy future in an affordable way," said Terry Bassham, KCP&L president and chief executive officer, in a January 8 statement announcing the initiatives. "We are committed to providing our customers with long-term energy solutions that reduce cost and offer more control of energy use."
One 200-MW windfarm is being developed by EDP Renewables (Houston, Texas), the U.S. unit of Energias de Portugal S.A (Lisbon, Portugal). That project is scheduled to be built near Waverly in Coffee County, Kansas.
The other 200-MW windfarm, slated to be built in Holt County, Missouri, will be constructed and operated by Element Power U.S. LLC (Portland, Oregon), a unit of private-equity company Hudson Clean Energy Partners (Teaneck, New Jersey), which invests in renewable power, alternative fuels, energy efficiency and storage.
Each wind project has a total investment value (TIV) of about $400 million. Both projects are expected to begin turning dirt early next year and be generating electricity by the end of 2016.
"We signed contracts for these two windfarms for three reasons: location, cost and environmental benefits," Galati said in an interview. "Because they will be located in close proximity to our service area, we will be minimizing the transmission risk associated with renewable energy projects. No new transmission lines will be needed to bring the energy to our customers. As for cost, both projects are expected to qualify for the federal Production Tax Credit (PTC). Regarding environmental benefits, we are working to bring our customers more environmentally friendly power options."
The PTC provides windfarm owners with a tax credit of 2.3 cents per kilowatt-hour of wind energy generated for a 10-year period, providing some portion of a project's capital cost was incurred prior to the end of 2013.
The addition of 400 MW of new wind generation will bring KCP&L's wind portfolio to about 939 MW, nearly doubling the amount of renewable energy in the utility's generation portfolio. Contracting for 400 MW of new wind generation "will be another step in diversifying our generation mix, which has already seen significant reductions in emissions from recent environmental upgrades made at several of our power plants," said KCP&L's Bassham.
"We know saving money and efficient energy use are priorities for our customers," continued the CEO. "We are proud of our ongoing efforts to provide customers innovative energy-efficiency options. The availability of these programs demonstrates our continued commitment to helping our customers reduce energy, save money and improve the environment."
Because it operates in two states, KCP&L is subject to two different state renewable portfolio standards (RPS). In its Kansas service area, 20% of its electricity must come from renewable energy sources by 2020. In its Missouri service area, 15% of its electricity must come from renewable resources by 2021.
"KCP&L is currently in compliance with the renewable energy standards mandates," Galati told Industrial Info. "In our Kansas territory, we project that we will be compliant with the renewable requirements through 2023. In our Missouri territory, we project we will remain in compliance with the Missouri renewable requirements, exclusive of the solar energy requirement, through 2035. Additionally, with the acquisition of solar renewable energy credits, we will be sufficient for compliance with the Missouri solar energy requirements for the foreseeable future."
View Plant Profile - 3004461 1087269
View Project Report - 300010426 28001821
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
KCP&L also wants to invest more than $29 million in its existing energy-efficiency programs, which would generate an estimated $400 million in total customer benefits over the next 20 years, KCP&L spokesperson Rebecca Galati told Industrial Info. "The total benefits estimation refers to the amount all customers will save by KCP&L offering these programs, even if they don't participate," she added. The Missouri Public Service Commission (MPSC) (Jefferson City, Missouri) will decide by May whether KCP&L will be allowed to expand its efficiency program.
Galati said purchasing wind power from the two windfarms under development would save KCP&L customers an additional $600 million over the contracts' 20-year lifespans. The utility, which provides electric service to more than 800,000 customers in northwest Missouri and eastern Kansas, has not made any decisions about retiring coal-fired generators in response to tighter federal environmental regulations.
"Taken as whole, our proposed investments in efficiency and wind power will help us meet customer needs for about $1 billion less than what we would pay if we didn't have those wind and efficiency resources," Galati said.
"These investments continue our commitment to move toward a more sustainable energy future in an affordable way," said Terry Bassham, KCP&L president and chief executive officer, in a January 8 statement announcing the initiatives. "We are committed to providing our customers with long-term energy solutions that reduce cost and offer more control of energy use."
One 200-MW windfarm is being developed by EDP Renewables (Houston, Texas), the U.S. unit of Energias de Portugal S.A (Lisbon, Portugal). That project is scheduled to be built near Waverly in Coffee County, Kansas.
The other 200-MW windfarm, slated to be built in Holt County, Missouri, will be constructed and operated by Element Power U.S. LLC (Portland, Oregon), a unit of private-equity company Hudson Clean Energy Partners (Teaneck, New Jersey), which invests in renewable power, alternative fuels, energy efficiency and storage.
Each wind project has a total investment value (TIV) of about $400 million. Both projects are expected to begin turning dirt early next year and be generating electricity by the end of 2016.
"We signed contracts for these two windfarms for three reasons: location, cost and environmental benefits," Galati said in an interview. "Because they will be located in close proximity to our service area, we will be minimizing the transmission risk associated with renewable energy projects. No new transmission lines will be needed to bring the energy to our customers. As for cost, both projects are expected to qualify for the federal Production Tax Credit (PTC). Regarding environmental benefits, we are working to bring our customers more environmentally friendly power options."
The PTC provides windfarm owners with a tax credit of 2.3 cents per kilowatt-hour of wind energy generated for a 10-year period, providing some portion of a project's capital cost was incurred prior to the end of 2013.
The addition of 400 MW of new wind generation will bring KCP&L's wind portfolio to about 939 MW, nearly doubling the amount of renewable energy in the utility's generation portfolio. Contracting for 400 MW of new wind generation "will be another step in diversifying our generation mix, which has already seen significant reductions in emissions from recent environmental upgrades made at several of our power plants," said KCP&L's Bassham.
"We know saving money and efficient energy use are priorities for our customers," continued the CEO. "We are proud of our ongoing efforts to provide customers innovative energy-efficiency options. The availability of these programs demonstrates our continued commitment to helping our customers reduce energy, save money and improve the environment."
Because it operates in two states, KCP&L is subject to two different state renewable portfolio standards (RPS). In its Kansas service area, 20% of its electricity must come from renewable energy sources by 2020. In its Missouri service area, 15% of its electricity must come from renewable resources by 2021.
"KCP&L is currently in compliance with the renewable energy standards mandates," Galati told Industrial Info. "In our Kansas territory, we project that we will be compliant with the renewable requirements through 2023. In our Missouri territory, we project we will remain in compliance with the Missouri renewable requirements, exclusive of the solar energy requirement, through 2035. Additionally, with the acquisition of solar renewable energy credits, we will be sufficient for compliance with the Missouri solar energy requirements for the foreseeable future."
View Plant Profile - 3004461 1087269
View Project Report - 300010426 28001821
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
