Empire hooks into coal-fired Arkansas plant

The Joplin utility announced Tuesday it had signed a contract to initially own 50 megawatts of the 665-megawatt Plum Point Power Plant near Osceola, Ark., for which construction is scheduled to begin this month. Funding for the plant’s construction includes Empire’s payment on interest from the $87 million investment.

Empire also entered into an agreement for an additional 50 megawatts with an option to convert those megawatts into an ownership interest in 2015.

Company officials say the need for the agreement is driven partly by the 2010 expiration of Empire’s 162-megawatt purchased-power contract with Westar Energy.

“Our long-term, least-cost resource plan calls for the addition of approximately 300 megawatts of coal-fired generation by mid-2010,” said Vice President Brad Beecher in a news release. “Continued robust growth in our service area plus the desire to reduce our dependence on natural gas-fired generation contributes to the need for additional coal generation.”

Also to meet its predicted increase in demand, Empire plans to purchase 100 megawatts from Iatan 2, a Kansas City plant scheduled for completion in 2010.

To fund the Plum Point project, Empire has increased its $150 million, five-year unsecured credit agreement to $226 million. The added $76 million will be allocated to support a letter of credit issued for Empire’s participation in the project.

The Plum Point project is being developed by Plum Point Energy Associates LLC, a wholly owned affiliate of LS Power Associates LP of St. Louis. Other partners include Plum Point Energy Associates, East Texas Electric Cooperative Inc. and Missouri Joint Municipal Electric Utility Commission.