Philadelphia (Platts)--2May2008

The plan by Sunflower Electric Power and its partners to build two 700-MW
coal-fired units at Sunflower's Holcomb power plant in western Kansas may have
been dealt a fatal blow Thursday night when the Kansas House of
Representatives failed to override Governor Kathleen Sebelius' veto of SB 148,
a controversial energy bill that would have permitted the coal project to
proceed.

The House vote to override the veto was 80-to-45, or four votes short of
the two-thirds majority that was needed. The House's original vote for the
bill earlier in April was 83-to-43, or one vote short. On Wednesday, the State
Senate voted 32-to-7 to override the veto.

In addition to granting the Sunflower coal project an air permit, the
bill would have established a mandatory renewable portfolio standard of 10% in
2012, 15% in 2016, and 20% in 2020.

The House's failure to override Sebelius' veto of SB 148 represents a
major victory for Sebelius and environmentalists, and a serious setback for
Sunflower. The electric-cooperative group for the past six months has been
trying to reverse the decision by Secretary of Health and Environment Roderick
Bremby last October to deny an air permit for the project because of concerns
about the impact of its carbon dioxide emissions. Staff at the Department of
Health and Environment had recommended that the permit be issued.

Sunflower filed administrative and legal appeals -- the Kansas Supreme
Court still is considering the latter -- and worked with legislative allies to
craft and advance a bill that would permit the Sunflower project to proceed.

Shortly after the House upheld her veto, Sebelius issued a statement
saying the move is good news for Kansas. "We are at a critical period for
energy policy in this state and this country. We must bridge the gap between
our growing energy needs, and the time when carbon capturing technology is a
commercial reality," Sebelius said. "I urge the legislature to work with me on
a new comprehensive energy policy -- one that truly serves the needs of entire
state, east and west," the governor added.