We operate our businesses as three segments: electric, gas and other. The Empire District Electric Company (EDE), a Kansas corporation organized in 1909, is an operating public utility engaged in the generation, purchase, transmission, distribution and sale of electricity in parts of Missouri, Kansas, Oklahoma and Arkansas. As part of our electric segment, we also provide water service to three towns in Missouri. The Empire District Gas Company (EDG) is our wholly owned subsidiary engaged in the distribution of natural gas in Missouri. Our other segment consists of our fiber optics business. In 2009, 87.5% of our gross operating revenues were provided from sales from our electric segment (including 0.4% from the sale of water), 11.5% from our gas segment, and 1.0% from our other segment.
The territory served by our electric operations embraces an area of about 10,000 square miles, located principally in southwestern Missouri, and also includes smaller areas in southeastern Kansas, northeastern Oklahoma and northwestern Arkansas. The principal economic activities of these areas include light industry, agriculture and tourism. Of our total 2009 retail electric revenues, approximately 89.1% came from Missouri customers, 5.1% from Kansas customers, 3.0% from Oklahoma customers and 2.8% from Arkansas customers.
We supply electric service at retail to 121 incorporated communities as of December 31, 2009, and to various unincorporated areas and at wholesale to four municipally owned distribution systems. The largest urban area we serve is the city of Joplin, Missouri, and its immediate vicinity, with a population of approximately 157,000. We operate under franchises having original terms of twenty years or longer in virtually all of the incorporated communities. Approximately 53% of our electric operating revenues in 2009 were derived from incorporated communities with franchises having at least ten years remaining and approximately 17% were derived from incorporated communities in which our franchises have remaining terms of ten years or less. Although our franchises contain no renewal provisions, in recent years we have obtained renewals of all of our expiring electric franchises prior to the expiration dates.
Our largest single on-system wholesale customer is the city of Monett, Missouri, which in 2009 accounted for approximately 3% of electric revenues. No single retail customer accounted for more than 2% of electric revenues in 2009.
Our gas operations serve customers in northwest, north central and west central Missouri. We provide natural gas distribution to 44 communities and 310 transportation customers as of December 31, 2009. The largest urban area we serve is the city of Sedalia with a population of over 20,000. We operate under franchises having original terms of twenty years in virtually all of the incorporated communities. Twenty-four of the franchises have 10 years or more remaining on their term. Although our franchises contain no renewal provisions, since our acquisition we have obtained renewals of all our expiring gas franchises prior to the expiration dates.
No single retail customer accounted for more than 4% of gas revenues in 2009.
Our other segment consists of our fiber optics business. As of December 31, 2009, we have 89 fiber customers.
Electric Generating Facilities and Capacity
We, and most other electric utilities with interstate transmission facilities, have placed our facilities under the Federal Energy Regulatory Commission (FERC) regulated open access tariffs that provide all wholesale buyers and sellers of electricity the opportunity to procure transmission services (at the same rates) that the utilities provide themselves. We are a member of the Southwest Power Pool Regional Transmission Organization (SPP RTO).
We currently supplement our on-system generating capacity with purchases of capacity and energy from other sources in order to meet the demands of our customers and the capacity margins applicable to us under current pooling agreements and National Electric Reliability Council rules. The SPP requires its members to maintain a minimum 12% capacity margin. We have contracted with Westar Energy for the purchase of 162 megawatts of capacity and energy through May 31, 2010 and have contracted to add 50 megawatts of purchased power beginning in 2010 from the Plum Point Energy Station discussed below. The amount of capacity purchased under such contracts supplements our on-system capacity and contributes to meeting our current expectations of future power needs.
In order to replace the 162 megawatts of capacity and energy from Westar Energy that is expiring May 31, 2010, we entered into contracts to add 200 megawatts of power to our system. This energy is to come from two new plants that are scheduled to be operational in 2010, with 100 megawatts from the new Plum Point Energy Station and 100 megawatts from the new Iatan 2 generating facility, each of which is described below. Due to the expected in-service delays of Plum Point and Iatan 2, however, we have arranged for sufficient alternative transmission and generating capacity to meet our expected needs for May 2010 through July 2010. The incremental costs associated with this alternative will not have a material impact on our earnings and will be subject to our fuel adjustment mechanism.
The Plum Point Energy Station is a new 665-megawatt, coal-fired generating facility which is being built near Osceola, Arkansas. Construction began in the spring of 2006 with completion scheduled for summer 2010. Initially we will own, through an undivided interest, 50 megawatts of the project's capacity for approximately $88.0 million in direct expenditures, excluding allowance for funds used during construction (AFUDC). We spent $83.8 million through December 31, 2009 and anticipate spending an additional $3.6 million in 2010 for construction expenses related to our 50 megawatt ownership share of Plum Point Unit 1. All of our actual and estimated construction expenditures exclude AFUDC and property taxes unless specified otherwise. We also have a long-term (30 year) purchased power agreement for an additional 50 megawatts of capacity and have the option to purchase an undivided ownership interest in the 50 megawatts covered by the purchased power agreement in 2015. During the third quarter of 2009, we entered into a 15 year capital lease for 54 railcars for our Plum Point plant.
We also purchased an undivided ownership interest in the coal-fired Iatan 2 generating facility to be operated by Kansas City Power & Light Company (KCP&L) and located at the site of the existing Iatan Generating Station (Iatan 1) near Weston, Missouri. We will own 12%, or approximately 100 megawatts, of the 850-megawatt unit. Construction began in the spring of 2006 with completion scheduled for the fall of 2010. Our share of the Iatan 2 construction expenditures is expected to be in a range of approximately $218 million to $230 million, excluding AFUDC and property taxes. As a requirement for the air permit for Iatan 2, and to help meet requirements of the Clean Air Interstate Rule (CAIR), additional emission control equipment was installed on Iatan 1. Our share of the Iatan 1 environmental costs was $54.0 million through December 31, 2009. KCP&L reported the equipment met regulatory in-service criteria as of April 19, 2009 and it is currently in service.
Our current capital expenditures budget, discussed below, includes $37.3 million in 2010 and $5.9 million in 2011 for our share of Iatan 2. At December 31, 2009, we have recorded approximately $192.0 million in construction expenditures on the Iatan 2 project. Of this amount, approximately $22.9 million of property expenditures common to both Iatan 1 and Iatan 2 were in service as of December 31, 2009.
Iatan 2 and Plum Point Unit 1 are important components of a long-term, least-cost resource plan to add approximately 200 megawatts of new coal-fired generation to our system in 2010. The plan is driven by the continued growth in our service area and the expiration of the Westar Energy purchased power contract described above. The Missouri Public Service Commission (MPSC) issued an order on August 2, 2005 approving a Stipulation and Agreement (Agreement) with an effective date of August 12, 2005 regarding our Experimental Regulatory Plan (Plan). The Agreement contains conditions related to some of the infrastructure investments discussed above, including Iatan 2, and environmental investments in Iatan 1, as well as the 150 MW combustion turbine at our Riverton Plant and the installation of Selective Catalytic Reduction (SCR) equipment at the Asbury coal-fired plant. The Riverton Plant combustion turbine and the Asbury SCR equipment were included in our 2007 Missouri rate case and are now in our Missouri rate base. The other parties to the Agreement include the Missouri Department of Natural Resources, the MPSC Staff, two of our industrial customers and the Office of the Public Counsel. We were also granted a certificate of convenience and necessity to participate in Iatan 2, and in connection therewith, obtained approval intended to provide adequate assurance to potential investors to make financial options available to us concerning our investment in Iatan 2.
We have a 20-year purchased power agreement with Cloud County Windfarm, LLC, owned by Horizon Wind Energy, Houston, Texas to purchase all of the output from the approximately 105-megawatt Phase 1 Meridian Wind Farm located in Cloud County, Kansas. The windfarm was declared commercial on December 15, 2008. We also have a 20-year contract with Elk River Windfarm, LLC to purchase approximately 550,000 megawatt-hours of energy per year. The windfarm was declared commercial on December 15, 2005. We do not own any portion of either windfarm.
The portion of the purchased power that may be counted as capacity from the Elk River Windfarm, LLC and the Cloud County Windfarm, LLC is included in this chart. Because the wind power is an intermittent, non-firm resource, SPP rating criteria does not allow us to count a substantial amount of the wind power as capacity.
The Westar contract years begin June 1 and run through May 31 of the following year. This contract ends May 31, 2010.
The contract years 2010 through 2013 assume 50 megawatts of purchased power capacity from Plum Point Unit 1, 50 megawatts of owned capacity from Plum Point Unit 1 and 100 megawatts of owned capacity from Iatan 2.
Includes an estimated 7 megawatts for the Elk River Windfarm, LLC and 8 megawatts for the Cloud County Windfarm, LLC.
The contract year 2010 assumes an additional 41 megawatts of purchased power capacity through a contract with Merrill Lynch to address the expected in-service delays of Plum Point and Iatan 2.
The charges for capacity purchases under the Westar contract referred to above during calendar year 2009 amounted to approximately $16.2 million. Minimum charges for capacity purchases under the Westar contract total approximately $16.2 million for the period June 1, 2009 through May 31, 2010.
The maximum hourly demand on our system reached a record high of 1,199 megawatts on January 8, 2010. Our previous winter peak of 1,100 megawatts was established on December 22, 2008. Our maximum hourly summer demand of 1,173 megawatts was set on August 15, 2007. Our previous summer record peak of 1,159 megawatts was established on July 19, 2006.
Gas Facilities
At December 31, 2009, our principal gas utility properties consisted of approximately 87 miles of transmission mains and approximately 1,118 miles of distribution mains.
Our all-time peak of 73,271 mcfs was established on January 7, 2010, replacing the previous record of 70,820 mcfs which was set on January 4, 2010.
Construction Program
Total property additions (including construction work in progress), excluding AFUDC, for the three years ended December 31, 2009, amounted to $527.1 million and retirements during the same period amounted to $39.6 million.
Construction expenditures for new generating facilities and additions to our transmission and distribution systems to meet projected increases in customer demand constitute the majority of the projected capital expenditures for the three-year period listed above.
A new combustion turbine previously scheduled to be installed by the summer of 2011 is currently delayed until 2015 as our generation regulation needs are being met through a combination of our existing units and the SPP energy imbalance market.
Estimated capital expenditures are reviewed and adjusted for, among other things, revised estimates of future capacity needs, the cost of funds necessary for construction and the availability and cost of alternative power. Actual capital expenditures may vary significantly from the estimates due to a number of factors including changes in customer requirements, construction delays, changes in equipment delivery schedules, ability to raise capital, environmental matters, the extent to which we receive timely and adequate rate increases, the extent of competition from independent power producers and cogenerators, other changes in business conditions and changes in legislation and regulation, including those relating to the energy industry.
Fuel and Natural Gas Supply
Electric Segment
In 2009, 55.1% of our total system input, based on kilowatt-hours generated, was supplied by our steam and combustion turbine generation units, 1.3% was supplied by our hydro generation, and we purchased the remaining 43.6%. Approximately 69.8% of the total fuel requirements for our generating units in 2009 (based on kilowatt-hours generated) were supplied by coal and approximately 29.8% supplied by natural gas with fuel oil and tire-derived fuel (TDF), which is produced from discarded passenger car tires, providing the remainder. The amount and percentage of electricity generated by natural gas decreased in 2009 as compared to 2008 while the amount of energy we purchased increased, primarily reflecting that it was more economical to purchase power during this period than to produce gas-fired generation and reflecting increased purchases of power under our two contracts with windfarms. We offset the cost of these contracts by purchasing less higher-priced power from other suppliers or by displacing on-system generation.
Our Asbury Plant is fueled primarily by coal with oil being used as start-up fuel and TDF being used as a supplement fuel. In 2009, Asbury burned a coal blend consisting of approximately 86.8% Western coal (Powder River Basin) and 13.2% blend coal on a tonnage basis. Our average coal inventory target at Asbury is approximately 60 days. As of December 31, 2009, we had sufficient coal on hand to supply anticipated requirements at Asbury for up to 95 days, as compared to 96-97 days as of December 31, 2008, depending on the actual blend ratio within this range.
Our Riverton Plant fuel requirements are primarily met by coal with the remainder supplied by natural gas, petroleum coke and oil. We installed a Siemens V84.3A2 gas combustion turbine (Unit 12) at our Riverton plant in 2007. Riverton Unit 12 and three other smaller units are fueled by natural gas. During 2009, Riverton Units 7 and 8 burned an estimated blend of approximately 82.1% Western coal (Powder River Basin) and 17.9% petroleum coke on a tonnage basis. Our average coal inventory target at Riverton is approximately 60 days. Riverton Unit 7 requires a minimum amount of blend fuel to operate, while Riverton Unit 8 can burn 100% Western coal or a mix of Western and blend fuel. Based on these assumptions, we had sufficient coal as of December 31, 2009 to run 36 days on both units as compared to 43 days as of December 31, 2008.
We have secured 98% of our anticipated coal requirements for 2010, 59% for 2011, 28% for 2012 and 30% for 2013 through a combination of contracts and binding proposals. All of the Western coal is shipped to the Asbury Plant by rail, a distance of approximately 800 miles, under a five-year contract with the Burlington Northern and Santa Fe Railway Company (BNSF) and the Kansas City Southern Railway Company which expires on June 29, 2010. We are currently in the process of selecting a vendor to provide future rail service. The overall delivered price of coal is expected to be slightly higher in 2010 than in 2009 due to increased market costs. Riverton receives its Western inventory from the coal transported by train to the Asbury Plant which is then transported by truck to Riverton.
We currently lease one aluminum unit train on a full time basis and a second set is leased on an interim basis to deliver Western coal to the Asbury Plant. During the third quarter of 2009, we entered into a 15 year lease agreement for 54 railcars for our Plum Point plant, which is scheduled to be completed in the summer of 2010.
Unit 1 at the Iatan Plant is a coal-fired generating unit which is jointly-owned by KCP&L, a subsidiary of Great Plains Energy, Inc. and us, with our share of ownership being 12%. KCP&L is the operator of this plant and is responsible for arranging its fuel supply. KCP&L has secured contracts for low sulfur Western coal in quantities sufficient to meet 95% of Iatan's requirements for 2010 and approximately 40% for 2011, 40% for 2012, 40% for 2013 and 25% for 2014. The coal is transported by rail under a contract with BNSF Railway, which expires on December 31, 2010.
Our Energy Center and State Line combustion turbine facilities (not including the State Line Combined Cycle (SLCC) Unit, which is fueled 100% by natural gas) are fueled primarily by natural gas with oil also available for use primarily as backup. Based on kilowatt hours generated during 2009, Energy Center generation was 99.8% natural gas with the remainder being fuel oil, and essentially all of the State Line Unit 1 generation came from natural gas. As of December 31, 2009, oil inventories were sufficient for approximately 2 days of full load operation on Units No. 1, 2, 3 and 4 at the Energy Center and 5 days of full load operation for State Line Unit No. 1. As typical oil usage is minimal, these inventories are sufficient for our current requirements. Additional oil will be purchased as needed.
We have firm transportation agreements with Southern Star Central Pipeline, Inc. with original expiration dates of July 31, 2016, for the transportation of natural gas to the SLCC. This date is adjusted for periods of contract suspension by us during outages of the SLCC. This transportation agreement can also supply natural gas to State Line Unit No.1, the Energy Center or the Riverton Plant, as elected by us on a secondary basis. We also have a precedent agreement with Southern Star, which provides additional transportation capability until 2022. This contract provides firm transport to the sites listed above that previously were only served on a secondary basis. We expect that these transportation agreements will serve nearly all of our natural gas transportation needs for our generating plants over the next several years. Any remaining gas transportation requirements, although small, will be met by utilizing capacity release on other holder contracts, interruptible transport, or delivered to the plants by others. The majority of our physical natural gas supply requirements will be met by short-term forward contracts and spot market purchases. Forward natural gas commodity prices and volumes are hedged several years into the future in accordance with our Risk Management Policy in an attempt to lessen the volatility in our fuel expenditures and gain predictability.
We have signed an agreement with Southern Star to purchase one million Dths of firm gas storage service capacity for a period of five years beginning in April 2011. The reservation charge for this storage capacity is approximately $1.1 million annually. This storage capacity will enable us to better manage our natural gas commodity and transportation needs for our electric segment.
Our weighted average cost of fuel burned per kilowatt-hour generated was 3.1698 cents in 2009, 3.1307 cents in 2008 and 3.2197 cents in 2007.
Gas Segment
In June 2007, we acquired 10,000 MMBtus per day of firm transportation from Cheyenne Plains Pipeline Company so that up to 75% of our natural gas purchases going forward could come from the Rocky Mountain gas area. Cheyenne Plains interconnects with all of the interstate pipelines listed below that feed our market area.
We have agreements with many of the major suppliers in both the Midcontinent and Rocky Mountain regions that provide us with both supply and price diversity. We expanded our supplier base in 2008 and will continue to do so to enhance supply reliability as well as provide for increased price competition.