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March 3, 2008 - AECI Suspends Plans to Build Norborne Power Plant

Associated Electric Cooperative Inc., the wholesale power supplier for 57 electric cooperatives in Missouri, southeast Iowa and northeast Oklahoma, is delaying indefinitely its plans to build a 660-megawatt coal plant near Norborne, Mo., due to increasing costs and other uncertainties.
The Norborne project costs have significantly increased in less than three years and are now estimated at $2 billion due to worldwide demand for engineering, skilled labor, equipment and materials.

The U.S. Department of Agriculture Rural Utilities Service, a traditional funding source for rural electric cooperatives, is currently unable to finance baseload generation for cooperatives. Although AECI’s AA credit rating is one of the strongest ratings among all electric utilities nationally, seeking private lending would further increase project costs.

There also is increasing uncertainty in the regulatory environment, and Congress continues to debate the environmental and economic impact of reducing greenhouse gas emissions, making the cost of reducing carbon dioxide from power plants unknown.

The Norborne project has been a major undertaking the past four years for the three-tiered system of cooperatives that includes AECI. This work included extensive research, planning and analysis, as well as member and public involvement in numerous public meetings regarding the project.

AECI had pursued the Norborne coal-based project to meet growing loads of rural electric cooperatives that serve 850,000 customers. AECI projects member cooperatives’ electricity requirements will continue growing about 2 percent a year for the next 10 years – or about 100 megawatts a year. This growth is equivalent to adding about 30,000 homes each year. AECI will continue to look at energy efficiency initiatives, natural gas, renewables and nuclear resources to address future generation needs.

AECI is working to increase the efficient use of energy to help slow the growth in energy consumption and save members money. AECI is implementing a systemwide energy efficiency program “Take Control & Save” in 2008 that will build upon the work of local electric cooperatives.

AECI continues to pursue renewable energy opportunities. The cooperative helped make Missouri’s first wind farms possible, and it is the only utility with Missouri-based wind on its system. The three wind farms in northwest Missouri will provide 1 percent of projected 2008 energy requirements of cooperative members.

Associated Electric Cooperative Inc. is owned by and provides wholesale power to six regional and 51 local electric cooperative systems in Missouri, southeast Iowa and northeast Oklahoma that serve more than 850,000 customers. AECI’s mission is to provide an economical and reliable power supply and support services to its members. AECI is a Touchstone Energy Cooperative.

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