U.P. energy future has firm foundation with approval of new plants

October 26, 2017

LANSING – Gov. Rick Snyder, the Michigan Agency for Energy and Attorney General’s Office are praising the decision by the Michigan Public Service Commission to approve a proposal to build two power generation plants in the Upper Peninsula as a strong move toward improving electric reliability for Upper Peninsula residents.

“Today’s decision is the result of years of work to find a solution that put Michiganders in charge of Michigan’s energy future,” said Gov. Snyder. “Upper Peninsula residents can now move forward with a solution that allows them to control more of what happens with their energy supply.”

Upper Michigan Energy Resources Corp. (UMERC) is expected to build two natural-gas fueled facilities: one plant in Baraga Township and another in Negaunee Township, with construction beginning in the spring of 2018. Total cost to build both facilities will be just over $270 million. The plants are expected to be in service in 2019 and will replace the Presque Isle Power Plant (PIPP), which is slated to close in 2020.  

“The Commission’s decision today is the culmination of years of litigation by my office and in cooperation with the MPSC and Michigan Agency for Energy to ensure electric power reliability and affordability for the U.P.,” said Attorney General Bill Schuette. “My office was active in litigating the Wisconsin Energy Corporation merger before FERC and the MPSC, the creation of UMERC in 2016, and the now the approval of these two natural gas plants by UMERC in 2017. Every step of the way, my team worked hard to ensure that customers’ electric power needs and their pocketbooks were protected throughout this process.”

“These two plants, which are scheduled to be in service in 2019, can adapt to fit the U.P. customers’ needs in a more reliable and affordable fashion,” said Valerie Brader, Executive Director of the MAE. “The Michigan Agency for Energy is committed to helping find solutions to energy issues that have frustrated U.P. residents for so long. Today’s decision moves us one step closer to providing long-term relief to ratepayers.” 

The MPSC’s announcement comes in the same week the state won a key decision in a case before the Federal Energy Regulatory Commission (FERC) regarding past charges related to PIPP. FERC cut by nearly 50 percent the amount of money ratepayers have to make in system support resource (SSR) payments. FERC found that more than $23 million of charges by the utility were not just or reasonable.

“The two decisions are significant for affordability and reliability in the Upper Peninsula,” Brader said. “And UMERC’s proposal has another benefit: The natural gas-fueled facilities also offer a cleaner alternative to the older plants they are to replace, letting everyone breathe easier – literally.”