Michigan PSC OKs Two New Utility-Owned Power Plants, Utility Special Contract With Mining Customer
October 26,2017
The Michigan Public Service Commission (MPSC) approved a certificate of necessity submitted by Upper Michigan Energy Resources Corp. (UMERC) to build two power generation plants at a total cost of $277,200,000. The Commission said the two reciprocating internal combustion engine (RICE) electric generation facilities are the most reasonable and prudent means of meeting the utility’s power needs.
The Upper Peninsula Generation Project (Case No. U-18224) is expected to provide a total of 183 MW of power from the two facilities, one in Negaunee Township and a smaller one in Baraga Township, to serve the Tilden Mining Co. and non-mine customers.
The Commission today also approved a special contract with Tilden Mining. It allocates 50 percent of the capital cost of the RICE generators to the mine and all the fixed operations and maintenance as well as the variable O&M expenses for the energy used for meeting Tilden’s daily power needs.
UMERC said it plans to begin construction of both generation facilities in the spring of 2018 and commercial operation should begin at both sites by mid-2019.
Once construction is complete, UMERC said the Presque Isle Power Plant (PIPP) will close, ending the possibility of any new system support resource (SSR) payments to keep the plant running. Last week, the Federal Energy Regulatory Commission (FERC) cut by nearly $23 million the amount all ratepayers were required to make in SSR payments for PIPP. FERC next will decide how much money, if any, should be refunded to ratepayers.