Power to produce
By MIKE CORN
GOODLAND -- You can't beat such a deal, getting two pieces of good news at nearly the same time.
Just as Goodland Energy Resources was getting its permit from the state for its coal-fired power plant, a suitor signed a letter of intent to purchase the facility.
And the 22- megawatt power plant isn't even operational yet. That likely won't happen until about the first of July.
The offer to purchase the coal-fired power plant was made by Energy Holdings Limited, a relatively new entrant into the energy market.
Under the terms of its letter of intent, Goodland Energy Resources would sell its coal-fired plant to EHL for $42 million, if all goes well.
Located 5 miles west of Goodland, the plant sits with an ethanol plant also under construction.
Steam from the coal plant would be supplied to the ethanol plant to aid in its manufacturing process.
Although the plant has had its air permit for burning of coal for some time now, the plant's owners went back and asked for permission to modify its permit so it could burn other waste products, including tire chips and municipal waste.
That option, according to a release from EHL, would allow for emissions credits -- "an asset with significant future value."
Under terms of the permit, emissions of carbon dioxide would be limited to 270,000 tons a year, according to Kansas Department of Health and Environment spokesman Joe Blubaugh.
Other pollutants, he said, all are limited to less than 100 tons per year. Anything more than that, he said, would trigger different guidelines.
The coal plant is not the only venture taking place at Goodland.
The Goodland Energy Center is the umbrella organization, and owns the land where the coal-fired plant, Goodland Energy Resources, and the ethanol plant, E Caruso, will be located.
A bio-diesel plant originally had been included in the plans for the industrial park, but it is on hold indefinitely.
The ethanol plant will use corn and is expected to produce 20 million gallons of ethanol each year once it becomes operational.
Both facilities are under construction, and a small army of workers -- numbering about 100 at any given time -- are on the site each day.
Doug Sederstrom, Goodland Energy Center's chief financial officer, said the coal plant received its initial air permit in March 2006, which allowed for construction to begin.
Since that time, he said, the company went back in and asked to modify its permit, seeking permission to burn other products, such as sunflower hulls -- presumably from the ADM sunflower processing plant a few hundred yards to the south -- along with wood, tire chips and municipal waste.
"That's a new technology coming on in power plants," Sederstrom said. "It might not be something we do right away."
But it's a possibility.
"As we stand right now, coal is our option," he said.
Sederstrom was reluctant to talk in detail about the company's operations, but he did say the projects will require millions of dollars.
"I'm not going to pinpoint a specific amount," he said.
But it's a local venture, with most of the investors coming from Sherman County and the adjoining area.
"A significant part of the investment is Sherman County," he said.
In addition to work on both the coal and ethanol plants, the company is working on a transmission line that would connect to the city of Goodland's system.
While the plant will be able to interconnect with Goodland, there's currently no contract to sell power to the city.
Goodland did have a contract, but it expired because power was not delivered by a specific time.
That's not to say Goodland isn't willing to buy power from its local power plant.
"Right now, we have a letter of intent to renegotiate once they get up and running," said Goodland City Manager Wayne Hill. "Right now, they are in the process of building a power line from there to our substation."
Currently, Goodland has a wholesale power contract with Hays-based Sunflower Electric.
Goodland also has its own power plant, although it's not often used because of high diesel fuel costs.
But that plant can provide slightly more than 14 megawatts of electricity, enough to power the city. It was brought online recently when Sunflower had problems delivering power to the community.
It was supposed to be a two-hour outage, but that stretched out to six hours.
"At this point in time, we're going to keep that power plant ready to rock and roll," Hill said. "We're kind of a backup to Sunflower. If they call on us to supply power, they pay us for everything."
Hill didn't shy away from showing his support for the local venture, even though it didn't meet the deadline for supplying electricity.
"We still have a good working relationship with Goodland Energy Center," Hill said, "because we want to see them go."
Hill hopes the Goodland plant can produce and deliver electricity cheaper than it can be bought from Sunflower.
Currently, Goodland has a contract to purchase four megawatts of power from Sunflower. Anything above that amount is purchased at the going market rate by the hour.
"Bottom line, I'm very positive on this thing," Hill said. "There are a lot of people who have invested a lot of money."
And cheaper electricity would be an added benefit.
"If I can get cheaper electricity, you bet I will," he said. "Plus, I want to create the jobs."
Sederstrom would like to provide that electricity.
Ironically, the power plant won't be able to supply all of the power needed by the ethanol plant or the nearby ADM sunflower plant.
"The power plant will be a wholesale processor," he said. "Midwest Energy is supplying power to ADM, and some to the ethanol plant."