Sunflower pulls plug on wind contract after developer misses deadline

Mike Corn
Hays Daily News, July 9, 2006

Sunflower Electric's efforts to obtain renewable energy sources has been thwarted - temporarily.

Sunflower Electric Power Corp., based in Hays, has terminated its agreement with RES America Developments Inc. after the developer was unable to obtain financing to build the Marienthal-based project. Marienthal is in Wichita County.

The project, said Brian Evans, senior vice president for RES at Austin, Texas, isn't economically feasible at this time because of the skyrocketing costs for wind turbines.

"We'd like to build it," Evans said. "We're still hoping one day we can build it. But I don't think it will happen this year."

Sunflower pulled the plug on its part of the deal after a series of extensions were granted along the way. Construction was to have started on the project by July 1, according to the contract agreement, said Steve Miller, Sunflower spokesman.

Sunflower initially reached an agreement with RES back in February 2003.

Since then, there have been four or five amendments on the agreement, specifically relating to timetables for completion. Each one also sought to increase the cost to Sunflower.

Those increased costs weren't acceptable, Miller said.

Sunflower initially agreed to purchase a portion of the electricity generated by the wind farm.

"We were going to buy 30 (megawatts), which was enough to get them going," Miller said of the project.

That was also enough for RES to accept the suggestion of naming it the Sunflower wind farm.

The full size of the project, Evans said, was to have been 100 megawatts.

Miller said RES will have to pay a penalty for not fulfilling the terms of the contract, but he declined to say what that penalty might be.

The decision to terminate the purchase agreement with RES doesn't mean Sunflower won't be venturing into the renewable energy field.

Instead, they have created an internal group that is exploring all forms of renewable energy, Miller said.

"We formed a study group," he said. "We've got big ideas because we want to do renewable energy."

Sunflower's board has expressed its interest in renewable energy, but mandates that it be based in the utility's service area and that it not increase the cost of electricity.

Miller said the first meeting of the group will be July 17.

"We're going to study all forms, not just wind," Miller said of the renewable energy group.

Sunflower Electric is a regional wholesale power supplier with the capability to produce about 600 megawatts of electricity from its coal-fired plant near Holcomb and other smaller natural gas generators.

Sunflower has reached an agreement to build and operate two additional 600-megawatt coal-fired power plants at Holcomb for Tri-State Generation and Transmission Association Inc., based in Westminster, Colo. A fourth unit has been suggested but no agreement has been reached with any utility to build it.

Managing editor Mike Corn can be reached at (785) 628-1081, ext. 129, or by e-mail at mcorn@dailynews.net.