Holcomb power plant unlikely to be built, company says; $93 million already spent

? A controversial plan to build an 895-megawatt coal fired power plant in southwest Kansas now appears to be dead, company officials behind the project have said.

In an August filing with the Securities and Exchange Commission, Denver-based Tri-State Generation and Transmission Association described as “remote” the chances that it will ever build the plant, and it said the company is writing off as a loss more than $93 million it has already spent on the project.

“Although a final decision has not been made by our Board on whether to proceed with the construction of the Holcomb Expansion, we have assessed the probability of us entering into construction for the Holcomb Expansion as remote,” the company said. “Based on this assessment, we have determined that the costs incurred for the Holcomb Expansion are impaired and not recoverable.”

That statement came just five months after the Kansas Supreme Court cleared the way to proceed with construction, rejecting a challenge from environmental groups to an air permit issued by the Kansas Department of Health and Environment.

The plant had been in the works for more than a decade, however, and by the time that court decision came down, there were new federal regulations in place making it more difficult to build new coal-fired power plants, and the economics of renewable energy had changed significantly.

Tri-State and Sunflower Electric Cooperative based in Hays first proposed to expand an existing coal-fired plant in Holcomb in 2007, during the administration of former Democratic Gov. Kathleen Sebelius.

Later that year, Kansas Department of Health and Environment Secretary Rod Bremby stunned state officials when he denied a permit for the plant, citing carbon dioxide emissions and the dangers of global warming as the major reasons.

Many believed it to be the first time a public official in the United States had denied a permit based on concerns about climate change.

Lawmakers who questioned the science of climate change were harshly critical of the decision, including then-Sen. Jay Scott Elmer, who is now on the Kansas Corporation Commission, which regulates the electric industry in Kansas.

By 2010, however, Sebelius had been named to a cabinet position in President Barack Obama’s administration. Tri-State and Sunflower had down-sized the scope of their initial plan and applied for a revised permit, and Sebelius’ successor in the governor’s office, Mark Parkinson, was eager to resolve the matter.

In November of that year, after Parkinson said he supported the revised plan, Bremby stepped down as KDHE secretary, and the revised permit was issued.

The Sierra Club, however, continued to challenge that permit in court, a lawsuit that eventually led to the Kansas Supreme Court’s decision in March.

In its filing with the SEC, Tri-State said its board of directors had not yet decided how it plans to recover the $93 million loss, but it said it would not attempt to recover it through rates it charges its customers.