DTE Electric completes buy of 320-MW East China peaking plant

DTE Electric, a regulated utility subsidiary of DTE Energy (NYSE: DTE), told the Federal Energy Regulatory Commission in an Oct. 28 filing that it completed, as of Oct. 1, a purchase of a 320-MW, gas-fired power plant.

The members of the Federal Energy Regulatory Commission had on July 16 approved an application from DTE Electric and DTE East China LLC for authorization to permit DTE Electric to acquire this approximately 320-MW natural gas-fired peaking facility from DTE East China. The seller, DTE East China, is an unregulated subsidiary of DTE Energy. This facility is located in East China Township, Mich.

DTE Electric had solicited proposals for an asset purchase in order to meet its short-term and long-term reliability requirements. Only one entity submitted a bid that met DTE Electric’s selection criteria, which was DTE East China.

DTE Electric official Matthew T. Paul touched on this buy in Sept. 30 testimony filed at the Michigan Public Service Commission as part of the utility’s annual Power Supply Cost Recovery plan. He said that as of July 2014, DTE Electric entered into a Precedent Agreement with NEXUS Gas Transmission to provide firm natural gas transportation starting in 2017.

DTE Electric’s affiliate, DTE Gas Storage & Pipelines, and Spectra Energy Corp. are jointly developing the proposed NEXUS Gas Transmission project, which is designed to transport growing supplies of Appalachian Basin gas, including Utica and Marcellus shale gas production, to customers in the U.S. Midwest, including Ohio and Michigan, and to customers in Ontario, Canada, including the Dawn Hub. The service commencement date for the NEXUS project is currently targeted for November 2017.

Asked why DTE Electric is contracting with NEXUS starting in 2017 when no new combined cycle gas turbine projects are forecasted to be operating within this PSCR plan’s forecast window of 2016-2020, Paul responded: “DTE Electric is contracting with NEXUS starting in late 2017 because of the growth in the Company’s gas-fired generation fleet, the reliability concerns discussed above, and to take advantage of an opportunity to be an Anchor Shipper on a pipeline with access to the Utica/Marcellus shale region.”

He added: “Since the 2015 PSCR Plan was filed, DTE Electric acquired Renaissance Power Plant and is currently finalizing the acquisition of East China Power Plant (now Dean Power Plant). Both the acquisition of Renaissance and the intention to acquire an additional approximately 300 MW of gas-fired generation capacity were discussed in the DTE Electric 2014 Rate Case. Renaissance is a 732 MW gas-fired simple cycle power plant located in Carson City, MI. Renaissance is forecasted to consume 6.3 Bcf of natural gas in 2016, approximately the same forecasted gas consumption as the Company’s previous largest gas-fired generator, Greenwood Energy Center. The Company also expects to finalize the acquisition of Dean (formerly East China) in October 2015. Dean is a 320 MW gas-fired simple cycle power plant located in East China Township, MI. Dean is forecasted to consume 1.5 Bcf of natural gas in 2016. Together, the additions of Renaissance and Dean increase the Company’s forecasted natural gas requirements by approximately 75 percent.”

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.