Great Plains Energy Incorporated (GXP), a producer of nearly 6,600 MW of energy from diverse sources, has resolved to lower greenhouse gas emissions for electricity generation. The company said that its unit, Kansas City Power & Light Company (“KCP&L”), will no longer burn coal at three of its coal-fired power plants, namely, Montrose Station, one of its units at Lake Road Station and two of its units at Sibley Station.
However, the above decision will not impact Great Plains Energy’s employees at Montrose, Lake Road and Sibley. None of the existing employees in these plants will lose their jobs. KCP&L intends to find job opportunities within the company for displaced employees.
Coal unquestionably is a cheap source of fuel and is widely available in the U.S. This made it the preferred source of electricity generation in the country. However, it is a fact that coal-fired electricity plants are a major cause of environmental pollution.
The U.S. government has over the years formulated stricter regulations to lower emissions. In Jun 2014, the U.S. Environment Protection Agency (EPA) proposed a plan to lower carbon emission from power plants by 30% by 2030 from 2005 levels. To achieve regulatory compliance, electricity producers like Great Plains Energy among others are striving to produce more electricity from sources other than coal.
As a result, electric utilities are resorting to the use of natural gas, selling their obsolete coal units and/or retrofitting scrubbers at these units and also trying to utilize alternate energy sources to generate power.
KCP&L’s decision to stop using coal at three power plants was driven by its objective of meeting emission standards. In addition, the company plans to retire in excess of 700 MW of coal-fired power plants in the 2016–2021 time frame.
KCP&L has plans to add 400 MW of wind energy to its existing generation which is in sync with its objective to lower the carbon footprint. Going forward, we shall see higher investments in natural gas based power plants and alternate energy usage in the U.S.
Great Plains Energy Incorporated currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Wisconsin Energy Corp. (WEC), Brookfield Infrastructure Partners L.P. (BIP) and Huaneng Power International, Inc. (HNP), all sporting a Zacks Rank #1 (Strong Buy).
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