RDA Happenings July 2013
Posted on July 1, 2013 – By Emporia RDA
Project Sail and Westar Energy – Emporia Energy Center
Increased Tax Base
Some time ago in 2002, the RDA office worked with a company considering the construction of a combine power plant utilizing natural gas and the by-product of steam to be a “base-load” electric generation plant. It was a large power plant that needed to be adjacent to the intersection of several large transmission electrical lines.
The location identified was on Road 200 between Road S and Road U where the Westar Energy Lang Substation was located. The RDA assisted in determining the locations of natural gas lines and water, both potable and gray water and adjoining land owners for Project Sail. One of their team members either lived on the east coast or was an avid sailor; thus the code name of Project Sail.
The project’s due diligence proceeded over the next several months. A land purchase option was obtained. One of the largest challenges was securing 5,000,000 gallons of water a day for cooling purposes. Many options were being considered to supply the water, gray water, from the City of Emporia Sewage Treatment plant or Tyson’s lagoons with an eight- to nine-mile pipeline, and transbasin diversion of water from the Melvern Lake watershed. These were some really politically and engineering challenges. We never had to have the debate on these issues.
After four to six months, the project just ended, which is not uncommon in recruitment processes. Their reply was the project was on hold, and then finally not returned communications.
The takeaway from Project Sail is valuable site specific information was gathered from the project on the location of infrastructure such as the gas pipelines and the more obvious nexus of the two 115KW and the 345KW transmission lines. In the back of our minds we knew this site has great potential for electric power generation someday.
Three years past, on June 30, 2005, Westar Energy issued a request for proposals to all cities and coun-ties in their service area for information about two electric power plant projects. One was a base load coal fired electric generation plant and the other a natural gas “peaking plant” which generates electricity during peak loads.
The RDA staff completed the RFP’s on both projects and submitted the Emporia/Lyon County proposal on July 21, 2005. We met or exceeded all the requirements on the peaking plant, so we felt com-fortable with the site on Road 200 between Roads S & U location where the Westar Energy Lang Substation was located.
About a year later, in July 2006, a Westar Energy C-level executive called my office. The Emporia/Lyon County site was one of the top three sites. I was invited to a meeting to be held on July 20, 2006, at Westar Energy corporate headquarters in Topeka, Kansas. I informed him that the Emporia team would be glad to attend the meeting. He indicated at this point he only wanted me to attend the meeting. My thought was that’s interesting.
On the 20th of July 2006, I drove to Topeka and met with several of the Westar Energy management team who explained the project and what the next steps in selecting the location for the natural gas peaking plant would be. We were one of three Kansas locations being considered and at that point in time our site was their top location.
They needed my assistance in arranging a confidential meeting with the rural Lyon County leadership to determine whether Lyon County would favorably accept the project.
Then they asked if I could set up a meeting with two or three Lyon County community leaders in a week or less. On my drive back to Emporia, two persons came to mind – Jerry Karr and Myron Van Gundy. Over the years, I got to know both quite well and I value their leadership and ability to read the “political tea leaves” to determine the fate of the project.
After visiting with both Myron and Jerry, it was suggested I invite Joe Fehr who was the Chair of the North Lyon County School District to the meeting.
The meeting was arranged for July 27, 2006, at the Flint Hills Technical College conference room. The Lyon County leaders in attendance were Joe Fehr, Jerry Karr and Myron Van Gundy. Most of the Westar Energy corporate leadership and some of their engineering staff was at the meeting, and I was allowed to attend. After the Westar presentation, questions and discussion, the consensus of a few neighbors would not be pleased with the project be close to their homes, but overall the community would be accepting of the project.
On August 22, 2006, Westar Energy, the RDA and Lyon County Commissioners held a press conference at the Lyon County Commissioners meeting room. A huge win for the community!
The project was far from a done deal because various approvals of zoning and other governmental agencies had to be received. Within days of the media release, Westar Energy held several neighborhood meetings to discuss the proposed project.
All the various government approvals were given, the project was designed and bids were let. On March 12, 2007, at 9:00 a.m. the ground breaking at the new Emporia Energy Center site occurred. On June 11, 2008, at 11:30 a.m. the ribbon cutting was held.
The benefit to Lyon County was that Westar Energy the paving of Road U north from Road 175 to Road 200, then west to about ½ mile east of the intersection of Road 200 and Road S. Rural Water District #5 had their water system upgraded; the capacity to serve the water needs of Westar Energy and their customers. A water tower was constructed on the north side of Road 200 between the BNSF railroad tracks and Road S. The water improvements and paving was included in the Emporia Energy Center project costs.
The Emporia Energy project total investment was $308 million. The State of Kansas allows an automatic property tax exemption on the electric generator projects for six years. Since the project was designed and was built over 18 months, there were two exemptions granted on the project. The first exemption expires in 2013, so it will become part of the tax base for 2014. The second exemption expires in 2014 to be added to the tax base in 2015.
On June 27, 2013, according to an article in the Emporia Gazette, Westar’s valuation in Lyon County in-creased by $30,470,957. That represents a 14.38% increase in the tax base. Theoretically if amount of tax dollars stays constant then the county mill levy should be reduced by 14.38%. It is estimated that another $20 million will be added to the Lyon County and other political subdivisions in that area for next year or another 10% reduction next year.
The RDA lead on this project, and the community is beginning to receive a significant return on invest-ment.
One closing note, on July 1, 2013, the RDA celebrated its 20th year. Our organization has made a consider-able positive impact on our local economy with thousands of new and retained jobs and increased tax base for our economy. Let’s keep focused.