Kansas’ new governor, Mark Parkinson, and Sunflower Electric Power Corp. have reached a compromise that would allow that company to build an 895-MW coal plant in the western part of the state in exchange for Republican support for a state bill that encourages production of more renewable energy.

The deal was made Monday, days after Gov. Parkinson took office and following former Gov. Kathleen Sebelius’ confirmation as President Obama’s secretary of health and human services. Sebelius, a Democrat, had vetoed three state bills last year that would have allowed Sunflower’s two proposed coal plants to move forward.

“We’re bringing people together to create hundreds of jobs, increase our renewable energy production and ensure a comprehensive energy plan for our state,” said Governor Parkinson. “Prior to this agreement, the Legislature was at an impasse on energy issues. With this agreement, we can start to move forward.”

Sunflower Electric had hoped to build two 700-MW coal plants in Finney County, and it had proposed to sell 86% of the power produced to out-of-state electric cooperatives that were helping to finance the project. Sunflower had argued that the development fees it earned from these cooperatives would benefit Kansas ratepayers by providing capital for Sunflower’s investment in the project.

“The [new] proposal will allow our out-of-state cooperative partners to participate in the project in a smaller way while preserving the 200 megawatts needed by Kansas cooperative and municipal utilities. Agreement provisions for wind, biomass and transmission development will promote renewable energy development in central and western Kansas,” Sunflower CEO Earl Watkins said in a statement Monday. “We appreciate the leadership shown by the governor to recognize the need for baseload power in the Sunflower and Midwest Energy systems.”

The deal is expected to pave the way for the construction of 345-kV transmission lines to carry wind power out of state. Sunflower said it would also develop an Integrated Bioenergy Center to further develop renewable energy as well as set up additional biomass generation.

Environmental groups, like the Sierra Club, expressed disappointment at Parkinson’s compromise on the plant. Steve Miller, CEO of the American Coalition for Clean Coal Electricity (ACCCE), meanwhile, hailed the deal as a victory.

“[It] is a victory for the people of Kansas and neighboring states who will benefit from affordable energy, more well-paying jobs, and a cleaner environment with the expansion of the Holcomb plant using advanced coal technologies,” he said. “We commend Gov. Parkinson and Sunflower Electric Power Corporation for their constructive engagement that led to this agreement. We also appreciate the many members of the Kansas legislature who have steadfastly supported this important project.”

Sources: Sunflower Electric, Gov. Mark Parkinson, ACCCE