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Empire plans pivot to wind energy generation

Empire District Electric Co. on Tuesday filed an application with the Missouri Public Service Commission to more than triple the amount of energy it gets from wind for power generation, continuing the company’s â€“ and the industry’s â€“ move away from coal-fired power.

Empire’s filing requests permission for a $1.5 billion project to construct wind turbines in Southwest Missouri and eventually close its Asbury power plant.

The company plans to pursue an equity partnership that would take advantage of $800 million in federal tax incentives for the project, making Empire’s total investment $700 million, according to its announcement.

Costs associated with upgrades to the Asbury power plant were built into rates approved in mid-2015 by the PSC in Missouri. That increase raised the bill of Empire’s average residential customer by about $8 per month. Approximately 55 people currently work at the Asbury plant. The future of those jobs is unclear.

Empire says a dramatic flip in market forces has made it far more feasible economically to generate wind power as the cost continues to drop. The company estimates its costs for generating power with coal at Asbury are about $38 per megawatt-hour but would be close to $24 with wind, leading to a projected savings of more than $300 million over 20 years.

Blake Mertens, vice president of Empire’s electric operations, said Tuesday that advances in technology and reduced construction costs have brought down the cost of producing wind energy approximately by half in the six to seven years since Empire made began making upgrades to the Asbury plant. That makes pursuing wind the company’s “least-cost option,” he said.

“On the tech side, the rotor diameters are getting 10 to 20 percent greater,” he said. “The overall height of the wind turbines is higher. That means you can add that increased rotor diameter with the height, then you can get wind much higher, which is normally where wind is more abundant.”

Julie Maus, director of corporate communications, said the market changes in the cost to procure wind and coal power are so great that even with the cost of upgrades made to the Asbury plant, the wind project will save ratepayers money.

“Given all those costs of the construction and capital investment in this new wind initiative, it is still going to save about $10 per month for the average residential customer over the next 20 years,” Maus said.

Empire already uses some wind power through purchase agreements but calculates it can cut costs by constructing and using its own turbines.

“We are pleased to put forward this initiative, which demonstrates an innovative approach to reduce energy costs for our customers, while supporting our region by investing locally,” said Empire President David Swain.

Under the plan, closure of the Asbury plant would take place in approximately April 2019, more than 15 years before Empire plans originally forecast. Empire notes expensive upgrades are due to be made to the plant in the coming years, meaning even with the money it has spent on the site in the past seven years, it makes more economic sense to shutter the plant and pivot more heavily toward wind power.

The change in the market landscape for energy generation is one Empire said the industry didn’t see coming, but utilities across the nation have taken notice of the shift. Empire sees a 30 percent annual increase in renewable energy projects now, and 30,000 megawatts of renewables are already under construction.

Empire notes its power generation makeup was approximately 95 percent from coal as recently as 1997, but this new proposal could reduce that amount to 21 percent by 2023. While a reduction in coal-burning has environmental benefits, the economics of renewable energies are the driving factor for the proposal, according to the company.

Empire has already secured more than 40,000 acres of property in Jasper, Barton, Dade and Lawrence counties where wind turbines could be constructed. Property owners where the turbines are placed would be compensated for the land, Empire said.

The PSC will have to rule on the project by June 30, 2018, and it will need to be completed before the tax incentives run out in 2020.