Michigan PSC approves EPC contract for Cross Winds project

The Michigan Public Service Commission on Sept. 24 granted an approval to Consumers Energy related to the 105.4-MW Cross Winds wind energy project in Tuscola County, Mich.

On June 21, Consumers, a unit of CMS Energy (NYSE: CMS), had filed an application for ex parte commission review and approval of the Wind Turbine Purchase Agreement for the Cross Winds Energy Park. Cross Winds is a 105.4 MW wind farm. The commission approved this application on June 28.

On Sept. 5, Consumers filed an application requesting ex parte approval of the Balance of Plant Engineering, Procurement, and Construction (EPC) Contract with Barton Malow Co. and the Major Equipment Purchase Contract with ABB Inc. for the purchase of two substation transformers. That was the application approved on Sept. 24.

Consumers had issued a request for proposal (RFP) for EPC contractors on April 25 to six firms selected based on industry reputation, experience, and financial strength. All six responded by June 3. Consumers selected Barton Malow as the Cross Winds EPC contractor. Consumers issued a RFP for transformer suppliers on Feb. 27 to six suppliers selected based on industry reputation, experience, and financial strength. Five suppliers responded by March 29. ABB was selected as the most cost effective and technologically sound.

PSC staff concluded that Consumers’ RFP processes were acceptable and found that Consumers’ evaluation process provides assurances that the EPC and Transformer Contracts have reasonable and prudent terms and conditions and comply with the retail rate impacts of a state law.

Consumers has estimated that based on the EPC and Transformer Contracts, the levelized cost of energy for Cross Winds is $59 per MWh, with the benefit of the federal production tax credit (PTC) factored in, and $87 per MWh without the PTC. Due in part to negotiations with Barton Malow, Consumers was able to realize an overall project cost reduction because the June 21 wind turbine application contained an estimate of $62 per MWh (with the benefit of the PTC added on), and $90 per MWh without the PTC.

Consumers Energy said June 20 that it had signed a contract with General Electric (NYSE: GE) to supply 62 wind turbines for the Cross Winds Energy Park in Tuscola County. The contract calls for GE to provide the turbine units, each with a capacity of 1.7 MW for the Cross Winds project, scheduled for operation in late 2014. The total installed generation capacity of all 62 units is 105.4 MW. 

“We’re making excellent progress in the development of our second wind farm. We’re pleased to reach this agreement with GE for its 1.7-100 turbine, reported to be the most efficient of its class in the world today,” said Jack Hanson, senior vice president of energy resources for Consumers Energy, at the time. “Providing renewable energy to Michigan is part of our promise to provide low cost, reliable and environmentally responsible energy for our customers.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.