Future power production

MARQUETTE – In an order issued Thursday, the Michigan Public Service Commission canceled a pre-hearing conference for We Energies after the utility provided adequate specifics on how it plans to retrofit the Presque Isle Power Plant to meet new federal pollution standards and disclose any plans to add power generation for the region.

In May, the commission directed We Energies to explain why it failed to comply with a December order requiring the utility to file assessments of its ability to meet customer electric requirements through 2016.

The commission gave the company until June 2 to file additional documentation and show cause why it failed to comply with a Dec. 19 order that directed all regulated electric utilities, alternative electric suppliers, utility affiliates and certain power supply cooperatives and associations to file assessments of their abilities to meet their customers’ expected electric requirements for through 2016.

The public service commission said the utility regulator’s show cause investigation spans a three-year period because of the expected retirement of older generating units in the state as a result of new air quality requirements.

In its May order, the public service commission said We Energies filed self-assessment report documents March 26. However, commission staff expressed concern on April 14 the utility had not complied with the order.

We Energies was asked to file more information with the commission to “provide assurance to the commission that Michigan customers will continue to be provided with reliable service and to address the (utility’s) current plans to meet the upcoming environmental requirements or plans to add additional generation support that will be required if the requirements are not (met).”

We Energies filed more documents on May 1.

Those documents said the commission suggested We Energies has not adequately addressed its ability to meet its load in the constrained area of the Upper Peninsula.

“Specifically, staff expressed concerns that ‘reliability in the region will be compromised’ as a result of the need to retrofit the Presque Isle Power Plant to meet the emission standards by April 2016 under rules of the Environmental Protection Agency concerning Mercury and Air Toxic Standards,” the We Energies documents stated.

The utility told the commission it had entered into a System Support Resource agreement with the Midcontinent Independent System Operator, Inc. – which oversees the electrical grid in the Upper Midwest and part of Canada – to operate the plant through Jan. 31, 2015.

We Energies receives monthly payments of $4.3 million for the plant under the agreement. MISO is requiring We Energies to continue to operate the plant to preserve electric reliability in the region until alternative generation or transmission is provided.

“Although We Energies continues to evaluate PIPP alternatives, it is anticipated that PIPP will operate under some agreement through 2016,” We Energies told the commission in its March 26 filing.

On April 15, We Energies filed a notice with MISO of its intention to retire the plant. In the cover letter, the company said it addressed the environmental rule compliance issue.

In a May 13 order, the commission conditionally set a June 26 pre-hearing conference when We Energies would have been required to show cause why it should not be found in violation of the December order.

We Energies could avoid the pre-hearing conference by filing specifics on retrofitting plans for Presque Isle and any plans to add generation by a June 2 deadline. We Energies submitted 339 pages of documentation in response.

“The commission staff has reviewed these documents and has informed the commission that the show cause proceeding is no longer necessary because (We Energies) has supplied the commission with the information it was seeking,” the commission’s Thursday order states.

The pre-hearing conference before an administrative law judge has been canceled.

“While (We Energies’) current plans to address near-term reliability through 2016 appear to have been addressed at this time, the commission reminds (We Energies) that the need to ensure reliable, affordable electric power to its customers over the long run remains an outstanding issue to be revisited outside of this docket,” the order said.

Cathy Schulze of We Energies media relations said Friday the utility is satisfied with the public service commission’s decision.

“We provided the commission with the information requested to ensure our ability to provide reliable electric service to customers in Michigan’s Upper Peninsula,” Schulze said.

John Pepin can be reached at 906-228-2500, ext. 206. His email address is jpepin@miningjournal.net.