Wisconsin PSC okays sale by WEPCO of former Milwaukee coal plant

The Public Service Commission of Wisconsin on Jan. 15 approved an August 2015 application filed by Wisconsin Electric Power Co. (WEPCO) for authority to sell and transfer the operation of the existing steam production and distribution facilities known as the Milwaukee County Power Plant (MCPP) to Wisconsin Regional Medical Center Thermal Service Inc. (MRMC Thermal).

MMRC Thermal is a wholly-owned non-profit subsidiary of Milwaukee Regional Medical Center Inc. (MRMC Inc.). The facility is located in the city of Wauwatosa, Milwaukee County. In addition to producing steam and chilled water, MCPP is capable of producing a total of 11 MW of electricity from three existing electric generators and auxiliary equipment at the site. The electric generators will be retired prior to the transfer, and MCPP will no longer be fueled with coal or be capable of generating electricity. No regulatory approval is required for the transfer of the chilled water assets from Wisvest LLC, an affiliate of WEPCO, to MRMC Thermal.

The commission issued a certificate in 1995 authorizing WEPCO to purchase and operate the existing electric production and distribution facilities from Milwaukee County. The electric facilities included three electric generators and auxiliary equipment (combined rating of 11 MW), a 26.4-13.2-kV substation, and 13.2-kV primary distribution facilities.

MCPP was constructed in 1955 as a cogeneration, coal-fired plant that produces heating steam and electricity for customers and supplies steam to a chiller plant that generates chilled water for cooling. MCPP consists of five boilers for steam production, three turbines for electric generation, and a number of steam absorption and compressed refrigerant units for chilled water production. The plant uses approximately 160 tons of bituminous coal per day.

The property proposed for sale by WEPCO includes five boilers with a total rating of 405,000 pounds of steam per hour, auxiliary equipment, and steam facilities consisting of steam tunnels and pipes. In its current configuration, Boilers 1, 2, and 3 were installed in 1955 and utilize bituminous coal. There are three coal silos within MCPP and trucks deliver coal to the plant. Boiler 4 was installed in 1970 and uses natural gas as a base fuel and #2 oil as a backup fuel. Boiler 5 was added in 2009 and is fueled by natural gas only.

In addition to the existing asset purchase agreement, WEPCO and MRMC Thermal have also executed an Access and Service Agreement which grants MRMC Thermal access to the MCPP site to construct a transition boiler. MRMC Thermal is currently constructing a natural gas-fueled transition boiler so that upon closing, MCPP will run entirely on natural gas. The new transition boiler will allow for the coal boilers, turbine generators, and associated coal handling equipment to be retired prior to the change in ownership, eliminating the need to install air emissions control equipment.

Turbine generators 1 and 2 with a capacity of 3 MW each were installed in 1955. Turbine generator 3 with the capacity of 5 MW was added in 1964. Under the asset purchase deal, the existing turbine generators will be retired because the existing and the new transition gas boilers will not have sufficient high pressure steam to drive the turbine generators. Therefore, at closing of this sale, the plant will no longer be fueled with coal or be capable of generating electricity. WEPCO will provide electricity and Wisconsin Gas LLC will provide natural gas to MRMC Inc. and to MRMC Thermal, MCPP, and MRMC’s members. MRMC Thermal will have its own emergency backup generator.

Incidentally, the Wisconsin Department of Natural Resources was taking comment until Oct. 12 of last year on a draft approval of an air permit revision that covers the plan by WEPCO to shut the coal-fired boilers at this plant. Under the ICI Boiler MACT air rule, the facility’s three existing coal boilers (Boilers B21, B22, and B23) have a compliance date of Jan. 31, 2016. To comply with the ICI Boiler MACT, the company is electing to permanently shut down the three coal boilers. Before these boilers can be shut, their steam generating capabilities need to be replaced. As part of the proposed sale of the facility, the steam generating capabilities for the three coal boilers will be provided by replacement boilers operated by MRMC Thermal.

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.