Kansas City Power & Light Co. plans to retire six generating units at the company’s Montrose, Lake Road and Sibley Stations.
“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 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.