Cliffs: Plant plans progress

MARQUETTE – Plans to replace the aging coal-fired Presque Isle Power Plant in Marquette with a new natural gas-fueled cogeneration facility in Marquette County are moving forward on schedule, according to officials involved with the project.

Cliffs Natural Resources and Chicago-based Invenergy Thermal Development LLC announced a plan in early 2015 to construct the new facility on Cliffs’ property in Marquette County.

Mary Ryan, Invenergy’s senior manager of public affairs, declined to comment on the cost of construction and said an exact location is still being determined.

However, somewhere near the city of Palmer was listed as a possible site, according to a mid-December press release on the Michigan Economic Development Corporation’s website, which also announced the award of a $500,000 performance-based grant to Invenergy to assist with funding the project.

Pat Persico, Cliffs’ director of global communications, said the mining company is continuing to move toward establishing definitive agreements with Invenergy to develop the combined heat and electric power facility.

“The plan being contemplated by the parties call for a cogeneration facility to service a portion of … Cliffs’ future needs while also providing the residents of the Upper Peninsula with a reliable energy solution following the retirement of the Presque Isle Power Plant at the end of 2019,” Persico said in an email earlier this month. “Negotiations are proceeding on-schedule in terms of the deadlines established in the March 2015 energy settlement agreement.”

Under that agreement, Invenergy could build, own and operate the facility to provide Cliffs with electric power, steam for heat and some excess energy available to local utilities, though many details are still being determined. The facility would need to be in operation prior to the Presque Isle plant closure.

“Cliffs will continue to work with Invenergy in the near-term to address a number of outstanding issues and business terms that require resolution,” Persico said. “We cannot provide additional specifics regarding project negotiations at this time due to our confidentiality agreement with Invenergy.”

While the Presque Isle plant generates roughly 344 megawatts of power, the new cogeneration facility could have a generating capacity of 280 megawatts, according to documents from the Midcontinent Independent System Operator, which oversees the electric grid in the Upper Midwest and part of Canada.

The closure of the Presque Isle plant requires that new generation be built or the region’s transmission system be expanded to ensure electric reliability in the area.

In December, MISO approved plans for a $114 million transmission expansion project proposed by the American Transmission Co., which owns some of the transmission lines in the Upper Peninsula.

That project calls for construction of a new 57-mile 138-kilovolt line from ATC’s Plains Substation near Quinnesec to National Mine.

Jackie Olson, corporate spokeswoman for ATC, said the Plains-National project is anticipated to cost about $114 million and be in operation by 2020.

“It was one of several projects ATC studied over the last several years as part of our Northern Area Reliability Study, designed to anticipate the transmission needs of the Upper Peninsula,” Olson said. “Plains-National was identified as the appropriate solution to meet reliability needs if the Presque Isle Power Plant is retired and no replacement generation is planned.”

Cliffs and Invenergy officials declined to specifically address whether construction of the new generating facility would be feasible considering the potential closure of Cliffs’ Empire Mine in Marquette County.

According to officials, Cliffs has a partnership agreement in place that calls for the Empire Mine to continue operations through 2016, with a separate commercial agreement that calls for the life of the mine being planned through January 2017.

While MISO approval isn’t required for new generating facilities, it does look at necessary transmission system upgrades related to new generators that interconnect to the grid.

“It’s probably early to say what impact the plant will have on transmission planning in the region,” said Andy Schonert, corporate spokesman for MISO. “That information may be better understood later this year.”

Schonert said new generating facilities are typically not considered in MISO’s planning process until a Generator Interconnection Agreement is signed.

“MISO is actively working with everyone directly involved to move this project to the Generator Interconnection Agreement, it just has not been executed at this time at (the Federal Energy Regulatory Commission),” he said.

Ryan Jarvi can be reached at 906-228-2500, ext. 242.