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High demand makes equipment more costly
Thursday, December 28, 2006
Topeka — Westar Energy -- the state’s largest electric utility -- announced today it was postponing a decision on whether it will build a new coal-burning plant because of skyrocketing construction costs.
“When equipment and construction cost estimates grow by $200 million to $400 million in 18 months, it is necessary to proceed with caution,” said James Haines, Westar’s chief executive officer.
Westar started in May 2005 considering sites to build a $1 billion, 600-megawatt plant in the eastern third of the state.
The Topeka-based company planned to select a location by the end of this year, but has now postponed that indefinitely.
At the outset, a coal-burning plant was seen as the least expensive way to increase capacity, Westar said. But recent demand nationwide for coal plants has increased equipment and construction costs.
The company stated: “These dynamics have caused the gap in cost between coal plants and other methods of meeting customers’ need for energy to narrow.”
Haines said Westar would now look “at all options” to meet customers’ needs.
The proposal is different from Sunflower Electric’s plans to build three 700-megawatt plants next to its current 360-megawatt facility in the west Kansas town of Holcomb. The proposal has drawn criticism from Lawrence City Hall and other parties.
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