DTE to cut coal fleet by a third, issues RFP for gas plant

Louisville, Kentucky (Platts)--19Jun2014/501 pm EDT/2101 GMT


DTE Electric, Michigan's largest power utility with more than 2.1 million customers, plans to retire a third of its coal-fired generation, more than 2,000 MW, by 2025, and rely more on natural gas and renewables, mostly wind, the company said.

As a result, the utility is seeking bids to acquire a natural gas-fired plant to meet future Midcontinent Independent System Operator resource adequacy requirements, according to a request for proposals.

DTE Electric, a subsidiary of DTE Energy, has been under fire from environmentalists seeking a reduction in its coal-fired units, which account for more than 60% of its 11,000-MW portfolio.

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Overall, Michigan still gets about 50% of its power from coal, although that is less than neighboring states of Indiana, 81%, and Ohio, 66%.

Scott Simons, a DTE spokesman, said in an interview that DTE Electric "has begun retiring older and less efficient coal plants" to comply with new US Environmental Protection Agency rules. "Between now and 2025, we expect to retire one third of our coal capacity in Michigan."

Thus far, DTE has shuttered only one older coal plant, the 103-MW Harbor Beach station on the western shore of Lake Huron.

It is evaluating a number of options for the 523-MW River Rouge baseload plant located southwest of Detroit.

DTE is trying to decide whether to install dry sorbent injection and/or activated carbon injection technology on River Rouge, as well as the 1,547-MW St. Clair baseload plant near East China, Michigan, and the 776-MW Trenton Channel baseload plant near Trenton, Michigan, to meet the EPA's new Mercury and Air Toxics Standards rule and keep the aging coal plants running.

COMPANY TO HAVE 1,000 MW OF RENEWABLES

DTE is on track to have almost 1,000 MW of renewable energy resources, about of it 95% wind, by 2015, in keeping with the state's 10% by 2015 renewable portfolio standard.

But the company has no intention of retiring the 3,000-MW Monroe baseload coal plant, the largest power plant in its portfolio and the state's biggest generator. In recent years, DTE has spent about $2 billion on pollution controls at Monroe. Nor is the company planning to retire its roughly 1,100-MW Fermi 2 nuclear plant on Lake Erie.

According to Simons, DTE is accepting proposals until July 11 on the solicitation to acquire an operational gas plant using either simple cycle or combined-cycle technology.

DTE would buy, own and operate the facility, which must have "unforced capacity," as defined by MISO, of at least 50 MW.

DTE has told the PSC it needs additional capacity to address a projected capacity shortfall exceeding 900 MW over a three-year period ending in 2017.

--Bob Matyi, newsdesk@platts.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@platts.com

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