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 State commission approves creation of new UMERC utility

MARQUETTE — The Michigan Public Service Commission on Friday approved, with contingencies, the creation of a new Michigan-only utility that will serve roughly 40,000 electric and natural gas customers in the Upper Peninsula.

“Customers in the U.P. previously served by the Wisconsin Electric Power Company and Wisconsin Public Service Corporation will be served by the newly created Upper Michigan Energy Resources Corporation,” MPSC Chairwoman Sally Talberg said in a press release. “The commission expects that the new utility and other parties in the case will comply with the governance, financial, regulation and organization structure outline in the commission order.”

Talberg said the commission expects the establishment of UMERC will allow the 35,000 electric and 5,000 gas customers in the U.P. to have access to “affordable, reliable and safe energy.”

The new utility will become effective Jan. 1, with offices in Menominee and Iron Mountain, according to the release. It will operate as a subsidiary of WEC Energy Group, which is based in Milwaukee, Wisconsin.

“While we still need to review the order, (Friday’s) approval by the Michigan Public Service Commission is a positive step forward in the creation of our Michigan utility,” a statement from WEC Energy Group reads.

Approval regarding UMERC from the Public Service Commission of Wisconsin and the Federal Energy Regulatory Commission is still pending.

WEC Energy Group is also parent company to We Energies, the business name of Wisconsin Electric Power Company, which owns and operates the Presque Isle Power Plant in Marquette.

UMERC’s creation was approved by the MPSC with several conditions:

≤ UMERC must provide the MPSC with capital and operations plans annually on June 1;

≤ The three utilities must ensure MPSC staff has access to records pertaining to the Presque Isle Power Plant when the remaining book value and decommissioning costs of the plant are reviewed by the MPSC prior to inclusion and ultimate recovery from Michigan ratepayers;

≤ The utilities must not seek to change any terms of power purchase agreements until Jan. 1, 2020; and

≤ The utility must not seek nor support changes before the Federal Energy Regulatory Commission that will shift any costs to UMERC customers that are currently shared between Wisconsin and Michigan.

Should the creation of UMERC be finalized, it would become owner and operator of two new electric generating facilities being proposed in Baraga and Marquette counties. The natural gas-fueled facilities are expected to generate a total of 170 megawatts and be operational by 2019, allowing for the 2020 retirement of the coal-fired Presque Isle Power Plant.

The Negaunee Township Board on Thursday approved a resolution supporting the placement of one of those facilities, which would generate 130 megawatts, near the M-35 and Marquette County Road 492 intersection.

The two plants are estimated to cost $270 million, with half of the construction cost to be recouped through a 20-year power supply agreement between WEC Energy Group and Cliffs Natural Resources’ Tilden Mine, and the remainder to come from other UMERC ratepayers.

To view more information on the case, identified as U-18061, visit michigan.gov/mpsc and search the E-dockets.

Ryan Jarvi can be reached at 906-228-2500, ext. 270. His email address is rjarvi@miningjournal.net.

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