KANSAS CITY, Mo.--(BUSINESS WIRE)--Kansas City Power & Light Company (KCP&L) announced yesterday its plans to retire six generating units at the company’s Montrose, Lake Road and Sibley Stations. These actions further the company’s commitment to a sustainable energy future and balanced generation portfolio.
“When these power plants started operation more than 50 years ago, coal was the primary means of producing energy. Today, as part of our diverse portfolio, we have cleaner ways to generate the energy our customers need,” said Terry Bassham, President and CEO of Great Plains Energy and KCP&L. “After considering many options, it is clear that retiring units at Montrose, Lake Road and Sibley is the most cost-effective way to meet our customers’ energy needs as we continue to move to a more sustainable energy future.”
In 2015, KCP&L announced the company was considering retiring the coal units or converting them to an alternative fuel source at these plants. One coal-fired unit at the Lake Road Station was converted to natural gas in 2016. Since that time, several emerging industry trends and changing circumstances led the company to announce its plans to retire the six generating units.
A number of factors contributed to the decision to retire these units, including:
- Reduction in wholesale electricity market prices. The value of energy produced by these plants has dropped in recent years, primarily driven by new wind generation and lower natural gas prices.
- Near-term capacity needs. KCP&L does not anticipate needing new capacity for many years with expected relatively flat long-term peak load growth. In addition, the amount of reserve generating capacity the company is required to carry has been reduced.
- Plant age. The impacted units are older, with all beginning service between 1960-1969. Making costly investments in the units does not make financial sense when compared to other generation sources.
- Expected environmental compliance costs. It is not economic to retrofit these plants with the controls necessary to meet expected environmental requirements.
Wind energy sources have become a much more economic generation resource for the region. According to the Southwest Power Pool, of which KCP&L is a member, energy generation from wind has increased 30 percent year-over-year in 2016. KCP&L announced plans in 2016 to purchase an additional 500 megawatts (MW) of power from two new wind facilities at Osborn and Rock Creek. In 2017, the company is set to increase its renewable portfolio to more than 1,450 MW, or greater than 20 percent of KCP&L’s total generating capacity needs.
“In addition to our substantial renewable energy portfolio, KCP&L has the largest per capita energy efficiency portfolio of any investor-owned utility in the region,” said Bassham. “By retiring these plants, KCP&L is taking another step forward in our plan to provide cleaner, cost effective energy to our customers.”
KCP&L intends to retire all the Montrose and Sibley coal units by December 31, 2018. The Lake Road natural gas unit will be retired by December 31, 2019. Lake Road’s steam operations are not impacted by today’s announcement. KCP&L is committed to making every reasonable effort to find job opportunities within the company for employees currently working at these plants.
Timeline for Retirement:
|Lake Road 4/6||97 MW||1967||Dec. 31, 2019|
|Montrose 2||164 MW||1960||Dec. 31, 2018|
|Montrose 3||176 MW||1964||Dec. 31, 2018|
|Sibley 1||48 MW||1960||Dec. 31, 2018|
|Sibley 2||51 MW||1962||Dec. 31, 2018|
|Sibley 3||364 MW||1969||Dec. 31, 2018|
For more information on KCP&L’s sustainability efforts, visit www.kcpl.com/environment.
About Great Plains Energy:
Headquartered in Kansas City, Mo., Great Plains Energy Incorporated (NYSE: GXP) is the holding company of Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company, two of the leading regulated providers of electricity in the Midwest. Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company use KCP&L as a brand name. More information about the companies is available on the Internet at: www.greatplainsenergy.com or www.kcpl.com.
Statements made in this release that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, the outcome of regulatory proceedings, cost estimates of capital projects and other matters affecting future operations. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Great Plains Energy and KCP&L are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions in regional, national and international markets and their effects on sales, prices and costs; prices and availability of electricity in regional and national wholesale markets; market perception of the energy industry, Great Plains Energy and KCP&L changes in business strategy, operations or development plans; the outcome of contract negotiations for goods and services; effects of current or proposed state and federal legislative and regulatory actions or developments, including, but not limited to, deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding rates the Companies can charge for electricity; adverse changes in applicable laws, regulations, rules, principles or practices governing tax, accounting and environmental matters including, but not limited to, air and water quality; financial market conditions and performance including, but not limited to, changes in interest rates and credit spreads and in availability and cost of capital and the effects on nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including but not limited to cyber terrorism; ability to carry out marketing and sales plans; weather conditions including, but not limited to, weather-related damage and their effects on sales, prices and costs; cost, availability, quality and deliverability of fuel; the inherent uncertainties in estimating the effects of weather, economic conditions and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; Great Plains Energy’s ability to successfully manage transmission joint venture; the inherent risks associated with the ownership and operation of a nuclear facility including, but not limited to, environmental, health, safety, regulatory and financial risks; workforce risks, including, but not limited to, increased costs of retirement, health care and other benefits; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Other risk factors are detailed from time to time in Great Plains Energy’s and KCP&L’s quarterly reports on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission. Each forward-looking statement speaks only as of the date of the particular statement. Great Plains Energy and KCP&L undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.