The City of Garden City reported earlier this week that as of June 1, the municipal electric utility now uses more than 30 percent renewable energy resources to serve its customers, now that a portion of the city's power is coming from Buckeye Wind Energy Center in Ellis County.

Garden City is a member of the Kansas Municipal Energy Agency, which assists cities in securing low-cost power by pooling electric needs with other cities. KMEA entered into a contract with Invenergy, owner of the Buckeye Center, to purchase power for 21 member cities, including Garden City.

In November, the Garden City Commission approved a resolution authorizing the agreement with Buckeye Wind Energy Center and KMEA.

According to a memo from Garden City Public Utilities Director Mike Muirhead to the City Commission in November, KMEA members were given the opportunity to enter into a 25-year fixed price power purchase agreement negotiated by KMEA with Buckeye Wind Energy Cener, which went into operation in December 2015 and consists of 112 wind turbines producing approximately 200 MW of energy.

“I’m pleased that the city could participate in the Buckeye project to help bring low-cost, reliable power to the city,” Garden City Mayor Roy Cessna said in a city press release.

Beginning in 2019, the agreement is conservatively projected to save Garden City about $141,000 annually, according to Muirhead's November memo.

“From the Texas panhandle through North Dakota, the United States is flush with wind energy production with more to be installed,” Muirhead said in the city's press release. “The prevalent wind makes Kansas one of the top states for wind energy production."

The city also received news at Tuesday's City Commission meeting that Sunflower Electric Power Corp. and Mid-Kansas Electric Co., already sister companies, plan to merge.

Stuart Lowry, president and chief executive officer for both companies, said an application will be filed with the Kansas Corporation Commission in early July to gain approval for the merger.

“With a merger, sometimes there’s a change in the corporate name. That’s not going to happen,” Lowry said. “We’ll merge Mid-Kansas into Sunflower and continue to operate as Sunflower Electric Power Corporation going forward.”

Lowry said the next steps in the merger process would be meeting with stakeholders and providing information to city and county governments.

Lowry said Mid-Kansas initially was formed by Sunflower and its members to bid on the Aquila Kansas Electric utility property.

“The acquisition took over in 2005. Mid-Kansas took over Aquila in April of 2007,” Lowry said.

He said that Mid-Kansas has never had employees, and that Sunflower employees have operated Mid-Kansas properties.

“All employees essentially hold the same position with Mid-Kansas,” Lowry said. “ … the two companies already operate as combined entities. Really, that was the plan from the very beginning.”

Lowry said the plan is for both companies to continue to operate separately through 2019 and officially merge in 2020.

Rate decreases for customers of both companies are being forecasted in 2019.

“Putting the two companies together is going to give us a stronger balance, and that obviously translates to a better profile and a lower cost of borrowing,” he said. “We also believe that we’ll gain some operational efficiency by eliminating redundant activity, such as audits, formula rates and multiple tariffs.”

Muirhead said on Friday that if the merger is approved by the KCC, it probably would be a benefit to the rural electric cooperatives that own Sunflower and Mid-Kansas.

“Until the actual filing for the merger is filed at the KCC, there will be a lot of questions from municipal utilities across the state on how they may be impacted,” he said.

According to Muirhead, it is uncertain how the merger might impact Garden City since it is a member of the Kansas Municipal Energy Agency. Currently, the city doesn’t purchase power from Sunflower or Mid-Kansas.

“… Since Sunflower and (Mid-Kansas) will be merging their transmission systems — and their transmission rates— together, it could have an effect on what Garden City pays for transmission services.”

With the merger, there will be several benefits, Lowry said.

“Obviously, rates are important, and we’ll be able to stabilize rates in western Kansas by having one larger entity than having two separate, smaller entities,” he said, noting that rates are expected to stabilize in 2020, when the merger would take effect.

Another benefit to the merger is it would provide a stronger combined balance sheet and improve credit metrics, translating to lower cost borrowing, Lowry said.

Lowry stressed that the merger will not change Sunflower Electric’s presence in Garden City “in any way, shape or form."

According to Lowry, Sunflower has been in the Garden City area for more than 50 years. Sunflower’s Garden City office and transmission station currently employ 79, and the Holcomb station employs 147.

“There are no expected changes in the workforce as a consequence of the merger, no change in office locations or assets,” Lowry said.

Contact Josh Harbour at jharbour@gctelegram.com.

Correction: A previous version of this story incorrectly reported the rate projections for the two companies for 2019. Both companies are expecting a rate decrease in 2019.