Westar Energy Delays Selection of Site for Base Load Coal Plantadmin
Westar Energy, Inc. announced that it continues to evaluate potential plans and possible sites for a future base load coal plant, but that it is postponing a decision to allow further study. Earlier the company indicated that it expected to announce a preferred site for a plant by year end. The company cited sharply higher equipment and construction cost estimates as the reason for the delay.
“Our forecasts continue to show annual increases in our customers’ needs for electricity. When we started this process over a year ago, the lowest cost means to satisfy these needs was with a coal-fueled power plant. With the recent increases in the estimated cost of coal plants, however, that assumption does not necessarily remain valid,” said James Haines, Westar Energy chief executive officer. “When equipment and construction cost estimates grow by $200 million to $400 million in 18 months, it’s necessary to proceed with caution. Fortunately, we have been planning well in advance of our customers’ needs and are not forced into a difficult decision today,” added Haines. “We will continue to evaluate how best to meet our customers’ needs looking at all options and monitoring market conditions.”
The company said that most major engineering firms and equipment manufacturers of coal-fueled power plant equipment are at full production capacity and yet are not indicating any plans to significantly increase their production capability. As a result, fewer manufacturers and suppliers are bidding on new projects and equipment prices have escalated and become unpredictable. The company said that these dynamics have caused the gap in cost between coal plants and other methods of meeting customers’ need for energy to narrow. If demand for new base load coal-fired plants slows, these trends could quickly change.
Westar said it wishes to thank the many communities with which it has worked as it continues to evaluate its options. “We have had a tremendous outpouring of support from communities in Kansas as we have sought to find the best possible sites for a new coal plant,” Jim Ludwig, vice president regulatory and public affairs, said. “We know postponing our decision is a disappointment, and we wish to thank these community leaders for their patience as we continue to look at the best options for Kansas’ electrical infrastructure.”
Westar said it continues to invest in the infrastructure in Kansas to ensure its customers receive reliable, affordable electric energy. In August it announced plans to build a new natural gas-fired peaking power plant near Emporia. The company has also conducted community meetings to discuss the significant expansion of its transmission network in central Kansas to increase reliability and facilitate the flow of affordable energy. In addition, the company has added easy-to-use energy efficiency tools to its web site and is studying a variety of programs to help its customers manage their energy consumption.
Westar Energy, Inc. is the largest electric utility in Kansas, providing electric service to about 667,000 customers in the state. Westar Energy has nearly 6,100 megawatts of electric generation capacity and operates and coordinates approximately 33,000 miles of electric distribution and transmission lines.
For more information about Westar Energy, visit us on the Internet at http://www.westarenergy.com/ .
Forward-looking statements: Certain matters discussed in this news release are “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although Westar Energy believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. Therefore, actual results could vary materially from what we expect. Please review our Quarterly Report on Form 10-Q for the period ended September 30, 2006 for important risk factors that could cause results to differ materially from those in any such forward-looking statements. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made except as required by applicable laws or regulations.
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