We Energies nears joint venture deal on Presque Isle coal plant
Louisville, Kentucky (Platts)--5Nov2012/708 pm EST/008 GMT
A coal-fired power plant in Michigan's Upper Peninsula is close to
securing a second lease on life under a proposed joint venture agreement
nearing completion between current owner We Energies and Wolverine Power
A deal between the two utility companies to install pollution controls
on the 431-MW Presque Isle plant near Marquette on the shore of Lake Superior
could be announced before the end of 2012, Brian Manthey, a spokesman for
Milwaukee, Wisconsin-based We Energies, said Monday.
The pending joint venture means Presque Isle, whose five operating coal
units were placed in operation between 1974 and 1979, would not be retired or
converted to natural gas, as had been considered.
Article continues below...
Request a free trial of: Coal Outlook
Coal Outlook is delivered daily and focuses on marine fuel prices and supply in major ports worldwide. It is essential reading for those who require accurate and timely data on this market sector.
In October 2011, We Energies began evaluating options for the baseload
plant, including retiring the facility, switching it to gas or adding new air
quality controls because of new US Environmental Protection Agency rules.
None of the plant's units are scrubbed to reduce sulfur dioxide
Manthey quoted We Energies CEO Gale Klappa as saying that under the
proposed agreement, Wolverine would pay for the environmental upgrades and
receive an ownership interest in the plant.
Preliminary work already is under way. "We've completed the second phase
of engineering, and a detailed scope of work has been developed," Klappa
said. "If the joint venture moves forward, we would not expect our rate base
to be reduced. The transaction would, of course, be subject to customary
We Energies says any decision must make economic sense for its customers
and ensure a robust and reliable power supply for the Upper Peninsula.
Wolverine is a member-owned generation and transmission cooperative
based in Cadillac, Michigan. Wolverine officials could not be reached for
comment Monday. Wolverine supplies power to seven members who serve about
260,000 customers in Michigan.
According to Manthey, Presque Isle burns about 1.6 million st of
low-sulfur bituminous and subbituminous coal annually.
We Energies owns nearly 7,000 MW of capacity, of which 4,300 MW is
coal-fired. Its largest coal plants include the about 2,365-MW Oak Creek
plant on Lake Michigan at Oak Creek, Wisconsin, and the 1,200-MW Pleasant
Prairie station in Kenosha County, Wisconsin.
--Bob Matyi, email@example.com
--Edited by Keiron Greenhalgh, firstname.lastname@example.org