Michigan regulators approve DTE’s proposal to build natural gas facility in St. Clair County

The Michigan Public Service Commission on April 27 said that it has approved DTE Electric’s certificates of necessity (CONs) to build a natural gas-powered electric generation facility in St. Clair County to replace aging coal plants.

The commission said that it authorized the company to recoup up to $951.8m for the construction of the 1,100-MW combined cycle plant at DTE’s Belle River Power Plant site in East China Township. The commission noted that DTE had sought approval for $989m in cost recovery, but the commission approved a lower contingency amount recommended by its staff.

The commission said that in approving the CONs, it determined through an open hearing process with input from numerous stakeholders that the energy to be supplied by the project is needed, a natural gas combined cycle plant was the most reasonable and prudent means of meeting DTE’s future energy needs, and the company can recover up to $951.8m in costs for the plant through future rates charged to customers.

DTE has proposed building the facility on 40 acres next to the Belle River Power Plant, which is near transmission lines and high-pressure gas pipeline infrastructure, the commission said, adding that the company expects to begin construction in spring 2019, and have the plant operational in spring 2022.

The commission said that according to DTE, the energy produced will partially replace 2,100 MW of generation that will be lost when eight coal-fired units are retired between 2020 and 2023. DTE expects to close River Rouge Unit 3, St. Clair Units 1-3 and 6-7, and Trenton Channel Unit 9, the commission said, noting that St. Clair Unit 4 was retired after the company filed its three CONs that were decided in the April 27 order.

According to that order, the “project is an advanced-class generation technology, multi-shaft 2×1 combustion turbine combined cycle power plant burning natural gas fuel,” and will consist of two combustion turbine generators, as well as heat recovery steam generators equipped with natural gas duct burners located outdoors, which allows the use of duct firing, increasing the plant output with minimal impacts on heat rate or emissions. A steam turbine generator and some of the balance of plant equipment will be located indoors, the order said, adding that the plant will include best available control technology (BACT) for air emissions, including selective catalytic reduction and oxidation catalysts.

Among other things, the order called for DTE, in its integrated resource plan (IRP) filing on March 29, 2019, to include an additional scenario that evaluates a portfolio consisting of energy efficiency, renewable energy, demand response, storage, and other non-fossil fuel options, ramping up over the years preceding 2029, that could augment the approved natural gas combined cycle plant in 2022, and replace the capacity and energy lost due to the retirement of the Belle River Power Plant.

Also, DTE and commission staff are to collaborate with the Midcontinent ISO (MISO) and ITC on reliability planning for coal retirements, the order said.

The gas plant, while large, fills only a fraction of the power needs to be addressed by retiring plants representing thousands of megawatts in the state, the order said. Moreover, unlike coal, nuclear, or even older gas plants in the state, the gas plant’s expected 24/7 availability and ability to ramp output up and down quickly will better position the utility and regional grid operators to integrate such additional renewable energy as wind and solar, the order said.

The plant provides greater flexibility as Michigan moves toward a more diverse portfolio of resources with coal, nuclear, natural gas, wind, solar, biomass, expansions to pumped energy storage, demand response, as well as a strong commitment – on the order of 50% beyond statutory minimums – to energy efficiency, the order said.

“The commission encourages DTE Electric to continue to coordinate with MISO and ITC on reliability planning to accommodate the retiring coal plants,” the commission said in its order. “In addition, in DTE Electric’s 2019 IRP, the commission expects a far more robust analysis of transmission opportunities that might defer, displace, or optimize the amount, type, and location of additional generation based on up-to-date information about current and expected transmission system conditions and import/export capabilities. To ensure alternatives are fully considered in future IRP proceedings, and the system is optimized from a cost and reliability standpoint, the commission also expects DTE to work closely and collaboratively with ITC and other transmission owners to explore transmission solutions and to work toward integrating the company’s distribution planning efforts with resource planning.”

In a separate April 27 statement, DTE Electric President and COO Trevor Lauer said, in part, that to date, the company has “driven more than $2 billion in renewable energy investments, operate[s] 13 utility-scale wind farms and 31 solar parks, and recently submitted a plan to the [commission] to double our renewable energy capacity within the next five years. This year, we’ll commission our largest wind park to date, which will also be the largest wind park in the state.”

Lauer also said: “Our decision to complement our substantial investments in renewables with this natural gas plant allows us to take a big step toward reducing our carbon emissions while also keeping costs affordable and continuing to deliver 24/7 energy for our customers. We do not have to make a choice between what’s best for the environment and what’s best for the economy in the state of Michigan. With planning and collaboration, we can do both, and we heard your points around collaboration and it’s something we’ll work closely on.”

About Corina Rivera-Linares 3056 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.