Dive Brief:

• We Energies has agreed to a series of measures aimed at solving a power crisis on Michigan's Upper Peninsula (U.P.), the Milwaukee Journal-Sentinel reports. The core of the agreement calls for We Energies to sell its Presque Isle Power Plant to Upper Peninsula Power Co., which will step into the existing rates.
• The deal would protect U.P. ratepayers from years of costly system support resource (SSR) payments for the Presque Isle facility, and would provide replacement electric generation to avoid reliance on out of state coal plants.
• The deal would also allow the merger of Wisconsin Energy and Integrys Energy Group to move ahead without opposition from Michigan Gov. Rick Snyder's office.

Dive Insight:

Michigan Gov. Snyder's office has announced a series of deals aimed at solving the power situation on the U.P. and ultimately allowing the merger of Integrys and Wisconsin Energy to move ahead. Under the proposal, We Energies will sell the Presque Isle facility and the the region's residents will avoid millions in system support resource payments needed to keep the lights on.

The deal was reached between Snyder, Attorney General Bill Schuette, Wisconsin Energy, Upper Peninsula Power Co., Invenergy, and Cliffs Natural Resources Inc.

When Cliffs Natural Resources, a mine operator, switched power suppliers last year, the company took with it about 85% of Presque Isle's demand—along with the economic incentive for Wisconsin Energy to continue operating the facility. To keep the lights on, the Midcontinent Independent System Operator required the company to keep generating power from the 431-MW facility, with almost $100 million in costs allocated to ratepayers.