Economic Benefits

Power generated from the Holcomb Station Expansion Project will help meet the growing demand for electricity from electric cooperatives in seven states that serve more than 2 million consumers. Communities throughout the region will benefit from new jobs, new tax revenues and an increased demand for goods and services. The Project will maximize the value of the existing Holcomb Station site for the benefit of Sunflower six member systems for generations to come.

Benefits to Electric Cooperatives
The Project will provide the necessary baseload generation capacity required to meet growing load demands.  The successful completion of this Project will:

  • Provide a cost-efficient source of base load power.
  • Improve power system reliability with additional baseload generating capacity
  • Stabilize rates by reducing purchased power costs and dependence on expensive  natural gas-fired generation.
  • Bring competitively priced fuel diversity to the existing generation portfolios of the partners and participants.
  • Support construction of additional high-voltage transmission, particularly to the western grid.

Together, the partners and participants serve more than 2 million consumers with a combined service territory covering parts of seven states. These systems are not unique in their need for additional power. According to the National Rural Electric Cooperative Association, it is estimated that generation and transmission cooperatives across the United States will need to invest more than $65 billion in the next decade to build new generation and transmission facilities to serve their member systems and to install pollution control equipment on existing facilities.

Provides Base Load Generation
New base load generation is needed to serve electric consumers. As demand for energy exceeds the ability to generate base load power, purchased power costs have escalated. The Project addresses this power deficit through the construction of new base load generation. Base load generation resources, designed to operate nearly 24 hours a day, 365 days a year, offer the most efficient manner to add new resources while keeping costs down.

The Project will be owned by the partners in specific proportions not yet determined, though 200 MW will be utilized in Kansas. Construction is scheduled to take approximately 48 months.

Benefits to Sunflower Electric
The Project will maximize the value of the Holcomb Station site and will result in new sources of revenue for Sunflower that otherwise would have been required from Sunflower’s member systems. Sunflower will earn fees from the rental of existing common facilities; for operating and maintaining the new unit; and will benefit from spreading its labor and administrative expenses over an additional unit.

Local and Regional Benefits
The Project will create many benefits for communities located in the region. These include job creation, new tax revenues, and an increased demand for goods and services.

Current benefits of Holcomb Station
 Sunflower currently has a sizeable economic impact on the Garden City Kan,  area, western Kansas, and Kansas as a whole. For example, the direct and induced impacts of Sunflower’s existing operations have resulted in 364 jobs in western Kansas, providing earnings of $23.2 million per year and another $493,000 from jobs created by operation and maintenance purchases in western Kansas. In 2009, Sunflower paid more than $8 million in property taxes.

Benefits during construction
A 2010 economic impact study of the Holcomb Expansion Project, released today by the American Coalition for Clean Coal Electricity, illustrates that the project will have a significant economic benefit not only on southwest Kansas but on the entire Kansas economy. The study was performed by Dr. John Leatherman and Dr. Bill Golden from Kansas State University’s Department of Agricultural Economics.

Construction of the unit will generate nearly $2 billion in total economic activity. During the nearly four-year construction cycle, the project will create approximately 1,900 jobs at peak build-out, generating an estimated $250 million in labor income and $400 million in total income.

The initial construction spending is estimated to have a total impact of $2.2 billion throughout the state. During the construction phase, the project will also generate more than $29 million in state and local tax revenue.

Long-term benefits during operation
During each year of operation, the expanded facility will generate nearly $350 million in overall economic activity, which will support approximately 261 permanent jobs throughout Kansas with an annual labor income of more than $17 million and nearly $200 million in all types of income. Of those 261 jobs, 88 will be permanent jobs at the plant with an total annual payroll of approximately $6.5 million.

The economic impact of the project is statewide, generating more than $40 million in state and local taxes and $20 million federal taxes after construction. In total, the construction project is estimated to generate $61.6 million annually in new government revenue.

The Project will maximize the value of the Holcomb Station site and will result in new sources of revenue for Sunflower that otherwise would have been required from Sunflower’s member systems. Sunflower will earn fees from the rental of existing common facilities; for operating and maintaining the new unit; and will benefit from spreading its labor and administrative expenses over an additional unit. The economic value to ratepayers in central and western Kansas is just under $400 million over 30 years.

Purchase of Goods and Services
Construction and operation of the Project will result in the purchase of many goods and services for the power plant and by the workforce. Goods and services during construction will be obtained from various local, national, and international vendors.

Construction materials such as concrete, aggregate, and paint will likely be obtained locally, while major equipment such as the steam generator and steam turbines would be obtained nationally and internationally.

Tax Revenue
The unit is exempt from property taxes for the first 12 years of commercial operation, but after that period, it is projected the unit will be assessed annual property taxes of more than $5 million for the balance of the expected 50-year lifetime.

To view the complete economic impact study, prepared by Dr. Hohn Letherman and Dr. Bill Golden of the Kansas State University Department of Agricultural Economics, click the link below.