Dive Brief:
- We Energies wants mining company and large industrial customer Cliffs Natural Resources to formally guarantee the company will not abandon the utility's service before it can sell the Presque Isle Power Plant to a local utility in Michigan's Upper Peninsula, Midwest Energy News reports.
- In exchange, We Energies would no longer need millions of dollars in System Support Resource (SSR) payments from the Midcontinent Independent System Operator (MISO) to keep the facility running.
- Last month, We Energies agreed to a deal that would solve the power shortage crisis on the Upper Peninsula, with the arrangement calling for Upper Peninsula Power Co. to purchase the Presque Isle power plant and step into the existing rates.
Dive Insight:
Cliffs Natural Resources returned to the Presque Isle facility as a customer in February, but We Energies is continuing to collect subsidies to keep the facility running. The payments have been going into escrow, Midwest Energy News reports, as We Energies is wary that the mining company could again find power elsewhere and make the facility once again uneconomical to run.
The utility is slated to appear next week before state regulators to explain why it should continue to receive the payments. But if We Energies can strike a deal where Cliffs agrees to stay on as a customer until the plant is sold, the payments would no longer be necessary.
When Cliffs switched power suppliers last year, the company took with it about 85% of Presque Isle's demand. To keep the lights on, MISO required We Energies to keep generating power from the 431 MW facility, with almost $100 million in costs allocated to ratepayers.
