Wisconsin PSC re-looks at situation for Presque Isle coal plant

The Public Service Commission of Wisconsin is taking public comment until Nov. 21 on what it should reconsider related to recent changes to a Wolverine Power Supply Cooperative plan to buy one-third of the coal-fired Presque Isle plant from Wisconsin Electric Power (WEPCO).

On June 21, the commission approved an application for Wolverine to buy one-third of the plant, located in Michigan’s Upper Peninsula, in exchange for Wolverine putting up all of the money, around $130m-$140m, to retrofit the plant with new air emissions controls.

On Oct. 28, the commission sent out a notice that it is reopening the docket because of recent changes related to the Presque Isle Power Plant (PIPP).

“Since this Commission approved WEPCO’s request, there have been several significant developments,” the commission noted. “WEPCO lost its largest customer, the operator of two iron ore mines, and a significant amount of the load previously supported by PIPP. WEPCO has publicly stated that it has requested authorization from the Midcontinent Independent System Operator, Inc. (MISO), to suspend operation of PIPP beginning in February 2014 unless MISO determines that the plant is needed for reliability. On October 16, 2013, MISO designated PIPP units 5, 6, 7, 8 and 9 as System Support Resource units needed for reliability unless an alternative solution can be found. WEPCO has also publicly disclosed that it is reconsidering the joint venture with Wolverine approved by the Commission in this docket. In light of these recent developments, the Commission reopens its investigation in this docket to explore, among other things, whether the Final Decision in this docket remains appropriate.”

The commission said it seeks comment on the following issues:

  • What the reasonable possible outcomes, long term, are expected to be for PIPP and how those outcomes impact the commission’s approval in this docket;
  • Whether the loss of load at PIPP materially changes the economic analysis of the five options for complying with more stringent environmental standards that WEPCO submitted in this docket in support of its application and is that economic analysis still reasonable;
  • Whether, given the present and potentially future scenarios, the joint-ownership option still has the lowest net present value revenue requirement;
  • Are the terms of the PIPP Ownership and Operating Agreements between WEPCO and Wolverine still reasonable;
  • Is approval of the transaction still consistent with the general public interest;
  • Whether the commission should rescind, alter, or amend its final decision in this docket dated June 21;
  • What, if any, other issues should the commission consider in this situation, and what relief, if any, would be reasonable, just and necessary to protect the interests of Wisconsin ratepayers.

A WEPCO spokesman recently told GenerationHub that the utility is open to all options related to the Presque Isle plant – including the possibility of sell all of the plant to Wolverine.

Presque Isle Units 1-4 were retired some time ago. What’s left in operation are: Units 5 and 6, which each have 80 MW of capacity on bituminous coal and 55 MW on sub-bituminous coal; and Units 7-9, each with a range of 78 MW to 85 MW in capacity.

U.S. Energy Information Administration data shows deliveries to the Presque Isle plant earlier this year from the Spring Creek mine in the Montana Powder River Basin of Cloud Peak Energy (NYSE: CLD), and also the North Antelope Rochelle mine of Peabody Energy (NYSE: BTU) and the Black Thunder mine of Arch Coal (NYSE: ACI) in the Wyoming end of the PRB. 

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.