As it looks at adding unspecified power generating capacity, Michigan’s Wolverine Power Supply Cooperative on April 16 asked the Federal Energy Regulatory Commission for authorization on new financing needed to back up its capital plans.
The cooperative is asking for approval to enter into short- or long-term lines of credit, commercial paper, letters of credit, or similar facilities and to assume liabilities including guaranteeing similar debt of subsidiaries in a total amount not to exceed $300m. Wolverine requests that the commission approve this application by May 16, with the authorization effective on the date of the order.
“The funds obtained from the issuance of debt securities or assumption of liabilities for which this authorization is requested will be used, together with other available funds, to finance the construction and maintenance of, and modification or improvement to, new and existing electric facilities; to refinance existing debt; to meet working capital needs; and for other general corporate purposes,” the cooperative told FERC. “Wolverine is projecting to spend $60 million on transmission, generation, and distribution projects over the next two years as part of its long-term construction work plan. Additionally, Wolverine is investigating several options for generation that could result in capital expenditures of approximately $100 million over the next two years.”
Wolverine said it currently has and plans to extend $225m of existing lines. It is essential that Wolverine maintain adequate lines of credit to support its ongoing activities. Wolverine primarily uses these credit facilities for temporary funding of capital expenditures.
Wolverine obtains capacity and energy from its own units and/or long-term power supply contracts, including a 100% entitlement purchase from Peninsula Generation Cooperative, Wolverine’s wholly-owned subsidiary, which owns a minority share (less than 10%) of the coal-fired Ohio Valley Electric Corp. (OVEC). Wolverine purchases Peninsula’s entitlement to OVEC capacity and energy under a long-term contract for resale to Wolverine’s Distribution Cooperative Member-Owners.
Wolverine is a Midcontinent Independent System Operator (MISO) transmission owner with a transmission system consisting of about 1,200 miles of 69 kV and 138 kV looped transmission lines and associated facilities.
Wolverine within the past year has abandoned a long-delayed, coal-fired power project (600 MW in size) in Rogers City in Michigan’s northern Lower Peninsula, and called off a planned buy of one-third of the coal-fired Presque Isle power plant in the Upper Peninsula. So its generation plans lately have been in a state of flux.
On march 26, Wolverine filed a report with the Michigan Public Service Commission within a commission review of the capacity needs for in-state utilities in the 2014-2016 period. Wolverine said its portfolio for its transmission members includes 647 MW of summer generation capacity owned and operated by Wolverine for 2014 through 2016. Wolverine’s portfolio allocated to its transmission members includes long-term power contracts totaling 268 MW for the summer of 2014, and currently 218 MW for the summer of 2015 and 168 MW for the summer of 2016. Wolverine has sold 130 MW of capacity for 2014 through 2016 from Wolverine’s 6.65% ownership interest in two OVEC coal-fired generating facilities in the PJM Interconnection forward capacity market.
Wolverine’s transmission members’ estimated reserve margins are 13.3% for 2014, 13.7% for 2015, and 11.3% for 2016. Wolverine’s estimated reserve margin is 10.3% for 2014 through 2016 and Spartan Renewable Energy’s estimated reserve margin is 33.3% for 2014 through 2016. “At these levels, Wolverine has sufficient reserves in place to meet the forecasted demands during the 2014 through 2016 summer peak seasons for each of Wolverine’s three resource portfolios,” the March 26 report to the PSC said. “Wolverine remains committed to delivering reliable and competitively priced power supply to its members.”