Independence considers energy options
Although Evergy has recently announced long-term goals to retire its coal-fired power plants early if possible, that plan shouldn’t affect Independence Power & Light’s energy supply needs as they stand.
IPL has a contract through 2050 for 52 megawatts of power from the Iatan 2 power plant near Weston, which was built in 2010 by Kansas City Power & Light (now Evergy). It is the company’s newest coal plant. That agreement covers 26 percent of IPL’s purchased power.
Evergy says it plans to retire all coal plants at the end of their useful lives, which is currently estimated to be between 2040 and 2050, with the exception of Iatan 2.
In 2009, IPL started a 40-year agreement with the Nebraska City plant owned by Omaha Public Power District for 57 megawatts – an even greater share of IPL’s purchased power. While coal plants are slowly being phased out around the country, Jim Nail, general manager/director of IPL, noted that the Nebraska City and Iatan plants are two of the newest, cost-efficient coal plants in the country.
“From our contacts both at Evergy and Omaha,” Nail said, “neither of those are on the table for early retirement.”
“As far as we know, those contracts are stable.”
Just last year, Independence city officials completed a strenuous process for a 10-year contract for 45 megawatts from a natural gas plant in Oklahoma, Oneta, allowing the city to cease operations at the Blue Valley Power Plant. On the surface, Evergy’s plans with Iatan 2 won’t force IPL into another big discussion on power capacity in the immediate future.
In an online forum hosted by the grassroots citizen group Indy Energy, economist Ashok Gupta with the National Resources Defense Council said he believes Iatan will be Evergy’s last coal plant to be retired and estimates most of the others will take 15 to 20 years before they’re retired.
“Even with that goal there’s still some fossil fuel, coal plants,” he said. “They just run less.”
Gupta stressed that Evergy’s plans are nowhere near fruition.
“Nothing has been decided,” he said. “It’s a proposal that still needs a lot more details and still needs regulatory approval to go forward.”
When Evergy first revealed the possibility of early coal plant retirements without specifying Iatan, Council Member Mike Huff said that could “really rattle the city if that were to happen.”
Huff has said that, with interest for bonds at historic lows, the city could consider the possibility of buying into a more permanent power source or perhaps building one to fill some of IPL’s ongoing capacity requirements. What self-owned power isn’t used could be sold, he said.
Such a discussion should happen sooner rather than later to help assure the city’s power supply, Huff said.
“The can’s flat and rusted and can’t be kicked too much longer,” he said.
During the forum, Gupta said that with ever-evolving power technology, short-term capacity contracts and diverse portfolios are preferable for utilities, and advised they generally should shy away from building new in-house production, lest such an investment prove too costly a few years later.
“Technology’s changing too rapidly,” he said. “The biggest game changer is storage; battery costs have come down by 90 percent in the last 10 years alone.”
In addition to its coal agreements and the Oneta agreement in Oklahoma, IPL owns a share of the Dogwood gas plant in Pleasant Hill, which accounts for nearly one-fourth of the city’s power, and has two agreements with wind farms in Kansas that run to 2028 and the mid-2030s. The city’s community solar farm also generates a few megawatts, and its combustion turbines can provide a few more megawatts during peak usage.
“We’ve got a diverse portfolio of multiple different resources,” Nail said, “not only in variety, but they’re scattered (with end dates).”
One reason the city can even consider constructing a new power source is, even with the Blue Valley closure, it maintained a power plant license from federal regulators.
“Where that becomes important is it’s easier and cheaper to modify an existing permit than to get a new one,” Nail said. “If you meet the definition of a new source, then it becomes extremely difficult (to obtain).”