Rail Issues

More than 1.5 million tons of Powder River Basin coal is consumed each year at Sunflower's Holcomb Plant. This massive quantity of coal is delivered more than 750 from the mines in Wyoming to Holcomb, Kansas. This process requires more than 150 train loads of coal per year is delivered in 110 train car loads on a bi-weekly basis.

Sunflower owns one 110 train car set that is used on a continual basis and contracts for delivery of these cars with the Burlington/Santa Fe railroad.  Sunflower also participates in the leasing of another 120 train car set for deliveries of coal to Holcomb Station.

Coal is delivered from the Wyoming mine to Holcomb Station by the Burlington Northern and Atchison, Topeka & Santa Fe railroads. Burlington Northern transports the coal south to Pueblo, Colorado then crews route the train east for the last leg of the trip to Holcomb.

The coal necessary for Sunflower’s operation can only be economically delivered one way — by rail. Because it has access to only one rail route, Sunflower is considered a “captive shipper” and must aggressively pursue coal and rail pricing terms to remain competitive with other regional utilities that have access to alternative transportation suppliers. Negotiating the best possible coal and transportation contracts is an ongoing commitment Sunflower has made to its members.

Towards that end, Sunflower is continually working with Western Fuels Association, Inc. for the coal and its delivery. Western Fuels is a cooperatively owned coal supplier that Sunflower contracts with for coal supply purchases and deliveries. Included in Western, Fuels’ membership are rural electric generation and transmission cooperatives and municipal utilities.

The transportation cost associated with coal deliveries represents more than 50% of the operating cost of Holcomb Station. Sunflower is investigating alternative means to bring these cost down to a more economic level.

Sunflower filled an application in December, 2002 with the Surface Transportation Board for an alternative route to Holcomb utilizing rail routes from other rail companies to the plant site. The application also includes the construction of 5 miles of new rail facilities.

Whatever the outcome of the application, Sunflower will aggressively pursue the lowest cost for our coal transportation needs so that our electric rates remain competitive in the industry.