HAYS — Following an announcement by Tri-State Generation and Transmission Association on Wednesday, Jan. 15 that the utility will no longer pursue the Holcomb Expansion Project, Sunflower Electric Power Corporation announced that it will allow the project’s air permit to expire on March 27, 2020.
A release to the media on Wednesday stated, “The industry has changed over the last decade. The implementation of the Southwest Power Pool Integrated Market, growth in renewable energy, and changes in the economy have impacted the electricity market for Sunflower and our Members.”
Sunflower and Tri-State, which provide wholesale generation and transmission services to their member distribution electric cooperatives, began working together in 2005 to add super-critical coal-based units to Sunflower’s Holcomb Station, located near Holcomb, Kan. Both utilities were seeking a reliable, affordable resource to meet their members’ growing demand for electricity and had a need for additional capacity.
“Fifteen years ago, the price of natural gas was high, and wind generation was in its infancy,” said Stuart Lowry, president and CEO of Sunflower. “At that time, the expansion of Holcomb Station emerged as the best way to meet our members’ long-term needs for generating reliable, affordable energy.”
In 2005, Sunflower filed a Prevention of Significant Deterioration air permit application for three 700 MW supercritical pulverized coal units, later reduced to two 700 MW units. The Kansas Department of Health and Environment denied the air permit, and in 2009, Sunflower and the State of Kansas reached a compromise consisting of one 895 MW unit and several environmental initiatives.
The 2007 Purchase Option and Development Agreement between Sunflower and Tri-State required Sunflower to protect the optionality of the project as long as Tri-State chose to pursue the project. Sunflower supported Tri-State’s efforts to market the permit to other utilities, including securing two extensions of the air permit.
As part of the PODA, Sunflower could have participated in the project if developed and would have benefitted in multiple ways in addition to the production of energy.
“Dating back to 2000, even prior to the Holcomb Expansion Project, Sunflower worked with various project partners to capitalize on the potential operational synergies at Holcomb Station. Sunflower received fees to pursue development opportunities that have allowed us to provide energy to our member cooperatives at a cost otherwise not possible,” Lowry said. “We appreciate our working relationship with Tri-State and our other expansion partners who, like Sunflower, seek solutions to energy challenges that are in the best interest of electric cooperative members.”
About Sunflower—Sunflower Electric Power Corporation is a regional, wholesale generation and transmission supplier that operates a system of wind, natural gas, and coal-based generating plants and a transmission system of more than 2,000 miles for the needs of its members, who serve in central and western Kansas. Formed in 1957 and operated on the cooperative business model, Sunflower remains dedicated to serving its members by providing reliable power at the lowest possible cost consistent with sound business and cooperative practices.
Sunflower’s members include Lane-Scott Electric Cooperative Inc., Dighton; Pioneer Electric Cooperative Inc., Ulysses; Prairie Land Electric Cooperative Inc., Norton; Southern Pioneer Electric Company, Ulysses; The Victory Electric Cooperative Association Inc., Dodge City; Western Cooperative Electric Association Inc., WaKeeney; and Wheatland Electric Cooperative Inc., Scott City, Kansas. For more information, please visit Sunflower’s website at www.sunflower.net. This institution is an equal opportunity provider and employer.
