Wisconsin PSC okays revamped debt structure for possible Fox Unit 3 project

The Public Service Commission of Wisconsin on Oct. 19 approved a revised structure for a $750 million debt package that Wisconsin Public Service Corp. would use if it decides to move forward with the gas-fired Fox Energy Center Unit 3 project.

The approval covers a utility plan to issue and sell up to $750 million aggregate principal amount of long-term debt securities. On June 8, the commission issued a Certificate of Authority authorizing the issuance of $550,000,000 aggregate principal amount of long-term debt securities with an additional conditional authorization for $200,000,000 aggregate principal amount of long-term debt securitie, all to be issued if the commission grants WPSC a Certificate of Public Convenience and Necessity (CPCN) for the Fox Unit 3 project.

Subsequent to the commission’s June 8 order, Wisconsin Energy Corp. (now known as WEC Energy Group) completed its acquisition of the applicant’s parent, Integrys Energy Group. The applicant now finds it desirable to issue unsecured long-term debt securities as is custom for the applicant’s affiliated large Wisconsin utilities owned by WEC Energy Group, namely Wisconsin Electric Power and Wisconsin Gas LLC

On Oct. 6, WPSC filed a supplemental application requesting authorization to issue unsecured long-term debt securities with the minimum unsecured debt ratings of “A-” from Standard & Poor’s and “A1” from Moody’s.

Paragraph 1 of the original Certificate of Authority issued June 8 is amended as follows: “The applicant may issue, from time to time, up to $550,000,000 if a CPCN for Fox Unit 3 is not authorized, and an additional $200,000,000 if a CPCN for Fox Unit 3 is authorized, of aggregate principal amount of indebtedness….”

WPSC on June 3 officially withdrew an application with the PSC for approval of its 400-MW Fox Energy Center Unit 3 gas-fired project. The commission, in its May 21 approval of the Wisconsin Energy/Integrys merger, said that Wisconsin Electric Power has excess generating capacity and that WPSC may no longer need the Fox Unit 3 project. WPSC can apply again for this project at some point in the future if it can demonstrate a capacity need at that time.

In the meantime,  Wisconsin Power and Light (WPL) and Wisconsin Electric Power are in what could be the opening stages of a battle at the Wisconsin PSC over which may have the best way to meet WPL’s capacity needs. The commission is currently considering an April 24 application from WPL for a Certificate of Public Convenience and Necessity to build an approximately 650-MW, natural gas-fueled addition at its Riverside Energy Center in Rock County, Wisconsin. The addition is called the RECE (Riverside Energy Center Expansion) project.

Wisconsin Electric Power, now that it has WPSC as a sister company, is offering some of that excess capacity identified by the commission in shelving the Fox Unit 3 project to WPL in place of the Riverside expansion.

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.