MARQUETTE - A company working on building and maintaining new high-voltage electric transmission lines into the Upper Peninsula from Wisconsin said Wednesday the potential closure of the Presque Isle Power Plant is a scenario that's been considered in the past.
"Over the last three years, we've looked at that and others," said Brett French, senior regional manager of external relations for the American Transmission Co.
The company is pursuing projects that could compensate for the potential loss. Costs to customers at this point are undetermined, French said.
Earlier this month, We Energies officials planning long-range to contend with proposed federal environmental pollution regulations said there is a likelihood the plant - which is the only large coal-fueled generating facility in the U.P. - could be retired in 2017.
The announcement set off shockwaves throughout the region as local government officials, consumers, workers and others dependent on the plant began scrambling to determine the potential ramifications and possible solutions.
No final decision has been made, nor a specific timetable set for making one.
"This (retirement) is a likely outcome if nothing changes with the regulations," Bruce Ramme, vice president of We Energies environmental department, said Wednesday at the 2011 U.P. Energy Summit in Marquette.
The Presque Isle plant was built from 1955 to 1979, originally with nine operating units, five of which remain, producing a combined 431 megawatts of power. There are currently 170 employees at the facility.
"If the Presque Isle Power Plant does close in 2017, that's a major change in the topography of the system," said Charlie Severance, general manager of electric and renewable energy, for the Wisconsin Public Service Corporation.
We Energies officials said the Presque Isle plant fills two critical needs in the U.P.: the first is to serve customer electric demand - which includes substantial load from the Empire and Tilden mines - and second, to provide electric system voltage support and grid stability as part of the overall interrelated power generation and transmission system.
Ramme said the total load in the U.P. is 500 to 600 megawatts. We Energies services 440 megawatts of that load, 370 megawatts of which is retail.
There are several proposed federal regulations which could impact the Presque Isle Plant to varying degrees, including those concerning boilers, cross-state pollution, water intake structures and coal combustion residual rules.
Of greatest concern to We Energies are new National Ambient Air Quality Standards proposed for sulfur dioxide. The Clean Air Act requires the U.S. Environmental Protection Agency to establish NAAQS for pollutants considered harmful to public health and the environment.
The agency first set standards for oxides of nitrogen and sulfur in 1971. The EPA is currently working on a new review under a court-ordered schedule, which requires the agency to issue a final rule by March 20, 2012.
On July 12, the EPA issued a proposed new standard for a sulfur dioxide limit of 75 parts per billion, averaged over one hour.
"We believe it is 50 times more stringent than the standard we have to comply with today," Ramme said.
Significant additional controls would likely be required to operate the Presque Isle plant with coal if Marquette is determined by the Michigan Department of Environmental Quality as not attaining the standard, Ramme said.
"We do not currently believe the controls that would be required in this event by EPA would be economic for customers," Ramme said.
We Energies is considering a range of possible alternatives, including retirement, all of which require long lead times to put in place. Officials say they must pursue a solution quickly.
Additional air quality controls could be added to the Presque Isle plant, the facility could be repowered with natural gas - which would likely require a 90-mile pipeline to be built - or a new natural gas combined cycle plant could be built at Presque Isle, but more likely at another location, Ramme said.
We Energies Spokesman Brian Manthey said recently the most likely solution would be to develop new transmission line projects to bring additional electricity into the area. Manthey said whatever decision is made will be made in the interest of what makes most economic sense for customers and aimed at providing a robust, reliable power supply for the U.P.
Ramme said additional transmission is required in the U.P. and northeastern Wisconsin, regardless of the generation option ultimately selected. There is currently not enough power available for future development, even if the Presque Isle plant continues operating.
Severance said the U.P.-located power generation is also not adequate to serve current demand without imports.
"We rely on the transmission system," Severance said.
Severance said the goal is to provide electricity at prices that enable U.P. commerce to flourish. He said the region's electric infrastructure is improving robustness, but still needs work and that will cost money.
French said the American Transmission Co. has developed four sets of transmission line projects -known as the Northern Plan Proposal - which combined would resolve emerging concerns in the U.P. and northern Wisconsin.
The transmission company would initially focus on building a new 345-kilovolt line between Green Bay and Marquette and a new 138-kilovolt line between Marinette and Delta County. The projects would be in service by 2016.
For those two projects, costing an estimated $442 million, the company is seeking expedited review by the Midwest Independent System Operator Board by June 2012. The company is ready to build, pending approval, French said.
The two remaining components of plan, proposed for construction beyond 2016 and ready by 2018, would build a new 345-kilovolt line from Wausau, Wis. to Marquette County, at a cost of $423 million, and make roughly $135 million in reinforcements to the 138-kilovolt network between Marquette County and the eastern U.P.
"These are projects, regardless of Presque Isle, that we would be working to move forward with," French said. "We believe these to be very necessary."
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