No bidders for plant
MARQUETTE – The future of the coal-fired Presque Isle Power Plant remains uncertain after no bidders submitted proposals to buy the plant from the Wisconsin Electric Power Co. during a recent proposal solicitation effort.
A request for proposals was issued in January, with responses due to We Energies by March 3. Monday was to be the day the short list of bidders were to be notified.
However, a Wisconsin Electric spokesman said Tuesday there were no bidders.
“At this time, we have not received any proposals in response to the RFP,” said Brian Manthey, senior communications specialist with We Energies in Milwaukee, Wis.
We Energies expected successful bids to include purchase of 100 percent of We Energies ownership in the power plant, retention of the current workforce for at least 18 months, continued operation of the plant, assuming of any long-term contracts in effect at closing and all historic and future liabilities.
The utility wanted final proposals submitted by May 9; final offer negotiations completed by Aug. 1, with required regulatory approvals gained by March 13, 2015 and the sale closed a week later.
Last year, Cliffs Natural Resources announced it would be getting power for its two Marquette County mines from another provider. The Empire and Tilden mines were the biggest consumers of power from the plant. Cliffs consumed 270 to 280 megawatts of power from the 431-megawatt Presque Isle plant each day, according to the Michigan Public Service Commission.
In September, given Cliffs’ decision, We Energies filed a request with the Midcontinent Independent System Operator Inc., which oversees the electrical grid in the Upper Midwest and part of Canada, to suspend operations at the Presque Isle plant beginning in February 2014.
In October, the MISO concluded the Presque Isle Power Plant should remain operating, at least through 2014 and denied We Energies’ request to suspend operations at the plant.
The Presque Isle plant, which employs 170 workers, was built from 1955 to 1979, originally with nine operating units, five of which remain, producing a combined 431 megawatts of power.
The MISO determined all five units at the plant needed to remain operating to maintain a reliable electric system for electric customers in the Upper Peninsula. We Energies applied for system support resource subsidy payments from the MISO for operating a plant the utility wants to close.
We Energies and the MISO agreed on monthly payments of $4.3 million as equitable compensation to the utility for maintaining the five units at the Presque Isle plant. The Federal Energy Regulatory Commission must still approve the negotiated agreement.
Any payments to We Energies would be retroactive to Feb. 1.
“We will continue to operate the plant for at least another year under the system support resource agreement with the regional transmission authority (MISO),” Manthey said. “The long-term future operations of the plant remain uncertain.”
Last year, We Energies and the Cadillac-based Wolverine Power Cooperative could not come to terms on a deal to install $140 million of pollution controls at the plant. Wolverine had also considered buying the plant, but decided not to.
No additional companies have publicly expressed an interest in buying the power plant.
Despite the proposals schedule We Energies had in place, the utility will still consider new plans.
John Pepin can be reached at 906-228-2500, ext. 206.