KCP&L's La Cygne Power Plant to Receive Environmental Upgrades

KCP&L 24-Hour Media Hotline 
Kansas City, Mo. (August 19, 2011) — Today, the Kansas Corporation Commission issued an order regarding the environmental retrofits we proposed for our La Cygne power plant. These improvements are needed to meet federal and state regulations for air quality and emissions. 
In its order, the KCC agreed that we should move forward with the environmental retrofits. We are pleased the KCC agrees that retrofitting and continuing to operate La Cygne is a good decision that benefits our customers. 

Background Information

KCP&L’s La Cygne power plant will need to upgrade emissions control equipment for the plant to comply with federal EPA air quality regulations by June 1, 2015.
Earlier this year, we began a process with the Kansas Corporation Commission and other parties to conduct healthy debate and discussion before decisions are made about the best way to plan for our region’s energy future. Our analysis as part of this process indicated and still indicates that making these environmental retrofits and continuing to operate La Cygne is the lowest cost option for our customers. 
This will assist KCP&L in meeting our obligations under our agreement with the Kansas Department of Health and Environment (KDHE), the agency responsible for ensuring compliance with federal EPA air quality regulations. 

Frequently Asked Questions

Specifically, what retrofits were proposed? 

In order to comply with federal air quality regulations, our La Cygne power plant needs significant equipment upgrades. Specifically, La Cygne needs to receive a baghouse, wet scrubber and selective catalytic reduction (SCR) system to reduce emissions.

Why does KCP&L need to make these upgrades and why now? 

These upgrades will allow the power plant to continue producing power after June 2015, as part of an agreement KCP&L has with the KDHE. The KDHE is responsible for ensuring compliance with federal EPA air-quality regulations. We need to begin the process now because these types of upgrades take years to build and complete.

How does this project benefit customers?

Meeting the EPA regulations will allow the plant to continue generating base-load power using cost-effective coal. Our La Cygne plant produces a significant amount of the power our region relies on.

What is the benefit for the community of La Cygne, Kansas?

There will likely be an adjustment in tax revenue based on the project capital cost. There will also be approximately 1,500 construction workers on site during the peak of construction.

How much will the upgrades cost?

At this time, the total estimated cost of the project is $1.23 billion. KCP&L's share is half this amount, or $615 million, as we are a 50/50 partner owner with Westar.

How and when will this impact customer rates?

We are currently reviewing the order to understand how customer rates will be affected.

Why did you ask for an environmental cost recovery rider (ECRR)?

An environmental cost recovery rider (ECRR) would allow us to recover prudently incurred costs more quickly than the traditional way of setting rates. This has the effect of lowering total project costs because it reduces the need for us to borrow money to make these environmental retrofits. This is a benefit to customers, and the Commission still has a chance to review the prudence of our expenditures before they impact customer bills.

What happens if the project does not move forward? Will the plant be shut down?

La Cygne Generating Units will need environmental retrofits to comply with an agreement KCP&L has with the KDHE. The KDHE is responsible for ensuring compliance with federal EPA air-quality regulations. KCP&L will not operate the units if they do not comply with federal, state and local regulations.

Why do we need La Cygne when KCP&L just built Iatan Unit 2? 

Iatan Unit 2 was built as a resource for growing electricity demand from our customers. La Cygne Units 1 and 2 continue to provide customers low-cost electricity as they have for more than thirty years.

How does it make sense to invest in an older coal plant when the emphasis is on renewable energy? 

Coal is a reliable, price-stable way to generate the amount of electricity we need to supply our customers 24 hours per day. This amount of electricity is known as the base-load amount. While renewables, such as solar and wind, are beneficial in some ways, they are intermittent resources and are not yet able to provide reliable, uninterrupted base-load generation. Federal, state and local regulations impact how we operate our mix of energy resources. It is necessary to keep our fleet operational and in compliance with these regulations.
About KCP&L: 
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 and KCP&L Greater Missouri Operations 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.