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Conflicting remarks coming from power officials

Recent comments seem to indicate a change in their thinking

ANALYSIS

3/25/2004

by Mark Vasto
Landmark reporter

Reiterating claims that they are only in the process of permitting and haven't made any decisions to build, representatives of Great Plains Power (GPP) have nevertheless offered conflicting statements in the past week regarding their proposed plan to build an additional new power plant outside Weston in Platte County.
Originally presented as a "merchant power plant," plans for the 800-megawatt Weston Bend power plant had the energy produced at the facility being sold on the open market to the highest bidder as an unregulated plant. Recent statements from the company seem to show a change in their thinking - and a potential change in how the $1.7 million payment to the county is distributed.

The issue, to be sure, is a complex one: should the plant be constructed, it would provide more than $1.7 million annually to the West Platte School District and more than likely provide the area with 100 or more jobs. Opponents contend that the plant isn't worth the health and environmental risks, pointing to the fact that the Kansas City metropolitan area is already besieged with asthma and smog and that new plants would only exacerbate the situation. In addition, opponents balked at the idea of building a plant in an area that wouldn't use the power generated but would receive the pollution.

According to Dave McCoy, vice president of business development for GPP, the company is now re-examining its plans to build a new plant not only in Weston, but in Atchison, Kansas as well.
"We're working on our strategic plan now and it should be ready by mid-year," McCoy said, noting that the company has recently undergone a management change at the company's highest levels. Due to the changes, McCoy said the company hasn't " decided to build either power plant, or both or whether they will be regulated or unregulated." He stated that the company was moving ahead with permits for the plants "because of the long lead time associated with getting them."

Noting that the county recently ranked 26 out of 100 for metropolitan areas with most potential for growth in a survey conducted by the American Cities Demographic Journal, McCoy has begun to offer a different vision for the plant. McCoy told The Landmark and another area publication that the proposed power plant would supply electricity for the resulting increase in demand for power "due to the anticipated residential and industrial growth."

The change in rhetoric is a significant one. For one, it would seem to show a change within the corporate structure at Great Plains Energy, parent company of GPP and local energy provider Kansas City Power & Light. Great Plains Power was set up to be the unregulated arm of the company, able to sell energy on the open market, while KCP&L handled regulated, local energy sales.

Secondly, it could jeopardize the $1.7 million payment to the West Platte School District. As Superintendent Kyle Stephenson has noted, the district receives very little funding from the existing regulated Iatan power plant. This is due to what is sometimes referred to as a "pole" tax; the taxes accumulated from the power generated at the plant are shared throughout the system using the power.

The proposed $1.7 million windfall for the West Platte School District is already a topic of discussion among Missouri lawmakers. In the midst of a massive budget crisis that has seen the Missouri legislature hold back nearly $97 million of funding for public schools, insiders have indicated that if West Platte was to receive the $1.7 million from the power plant, they would likely lose a portion of state funding.

Perhaps more importantly, McCoy's assertion doesn't square with Platte County growth estimates.

While the survey he cites showing Platte County as the leader in growth potential for the metro area is correct, the county's strategic plan targets growth for the county to reach 100,000-120,000 residents by the year 2020. The county currently has around 75,000 residents.

Taking the outside number of the projection, the county would add roughly 45,000 residents to its population. According to Platte County Planning and Zoning, such a number would roughly equate to 20,000 new homes (Weston alone projects adding 100 to 500 families in the next 20 years). Since an 800-megawatt power plant is estimated to power roughly 800,000 homes, the new Weston Bend power plant would have enough power left over to power 780,000 new homes. At that rate of growth, it could take centuries for Platte County to utilize all the power from the plant to meet its own needs.

According to the Department of Energy (DOE), Great Plains has plans to build four additional power plants in the region at an undetermined site. Great Plains officials have acknowledged that the Iatan site was originally intended for four plants of which only one has been built so far. The company entered into a memorandum of understanding with boiler manufacturer Babcock & Wilcox in June 2001 to build up to five such plants.

The DOE noted that proposals to build new plants have risen in recent years but many have not come to fruition. Such speculative deals tend to operate on "boom and bust" cycles, which are based upon the economic climate of power plant markets.

McCoy said GPP would more than likely offer 50-megawatt units to prospective energy buyers if the project was to move forward but that the company was not seeking buyers at the moment.

"We floated a trial RFP (request for proposal) and got some proposals," McCoy said. "But we have no immediate plans for an RFP now."

 
 

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