Dive Brief:
- A deal which called for Wisconsin Energy to sell its Presque Isle coal facility on Michigan's Upper Peninsula has been scrapped, the Milwaukee-Wisconsin Journal Sentinel reports. The utility will operate the facility for another five years.
- We Energies had agreed to sell the plant, allowing customers to avoid millions in rate hikes while also garnering support for its proposed merger with Integrys Energy Group Inc. The new deal maintains that support.
- The utility will continue to operate the plant as long as its largest customer — mining company Cliffs Natural Resources — continues to be a customer while a new facility is constructed.
Dive Insight:
The situation on Michigan's Upper Peninsula took a turn last week, when the deal calling for We Energies to sell the Presque Isle facility for $1 fell through. Upper Peninsula Power Co. had agreed to take the facility and continue to supply power, after the plant's largest customer left and rates were about to rise significantly.
Under the new deal, Wisconsin Electric will not enter into a system support resource agreement for the operation of Presque Isle so long as the mines, if operational, remain full requirements customers of Wisconsin Electric. The agreement runs until the end of 2019, at which point a new gas-fired facility will be completed.
The utility said it could become an investor in power generation facilities the mines would construct.
The deal followed on the heels of Michigan Gov. Rick Snyder laying out his vision for the state's energy future, saying the state must take aggressive steps and set clear energy goals to reduce the chances that families and businesses will face dramatic rate price spikes and widespread outages. The plan includes a cost-based goal, with a target of 30% to 40% of renewable energy plus waste reduction within 10 years.
“Decisions we make in the coming years will keep energy more affordable and available through a variety of sources while we continue being good stewards of our lakes, air and land,” Snyder said.
