The Public Service Commission of Wisconsin on Nov. 8 approved a joint application from Wisconsin Power and Light (WP&L), Wisconsin Public Service Corp. (WPSC) and Madison Gas and Electric Co. (MGE) for approval of the transfer of partial ownership interests in Units 1 and 2 of the coal-fired Columbia Energy Center in Pardeeville, Wisconsin.
On Aug. 9, the applicants applied to the commission for authority for the transfer of ownership interests in Columbia representing approximately 80.3 MW of generating capacity from WPSC and MGE to WP&L. The application proposed a permanent, incremental transfer of ownership interests in Columbia from WPSC and MGE to WP&L, in exchange for capital expenditures by WP&L, starting on Jan. 1, 2016, and ending on June 1, 2020. The proposal modifies both the capital expenditure obligations of each owner and the ownership shares between the applicants.
Columbia is a jointly-owned, coal-fired plant. The applicants’ current ownership shares are: WP&L (46.2%), WPSC (31.8%), and MGE (22%). WP&L operates the facility subject to a joint operating agreement.
The applicants have entered into an agreement, the “Columbia Ownership Transfer,” under which up to 80.3 MW of capacity would permanently be transferred from WPSC and MGE to WP&L during the “Settlement Period” from Jan. 1, 2016, to June 1, 2020. At the completion of the Settlement Period, WP&L will have majority ownership in the plant.
The Columbia ownership transfer arose out of two agreements related to the gas-fired Riverside Energy Center Expansion project: one between WP&L and MGE, and the other between WP&L, WPSC, and Wisconsin Electric Power Co. (WEPCO). The commission took no action on these settlement agreements as part of its decision in the Riverside docket. The Riverside settlement agreements consist of four principal components, three of which describe purchase options for future capacity, and one which requires the parties to negotiate the Columbia Ownership Transfer, which is the subject of this application.
This agreement does not change the total plant capital investment at Columbia. The applicants used an average of the 2015 year-end net plant balance, divided by a capacity of 1,112 MW, to arrive at a price of $830,000 per MW.
Under the transfer agreement, the following is permitted:
- A transfer of up to approximately 47.4 MW of Columbia capacity from WPSC to WP&L;
- A transfer of up to approximately 32.9 MW of Columbia capacity from MGE to WP&L;
- An option for WPSC and MGE to opt out of expected Columbia capital expenditures to upgrade the coal pulverizers and steam turbines at Columbia Units 1 and 2.
Columbia consists of two coal-fired units, Unit 1 and Unit 2. The combined capacity of the two units is 1,112 MW. Unit 1 began operation in 1975 and Unit 2 in 1978.