MARQUETTE - A possible joint venture that would allow Marquette's Presque Isle Power Plant to continue operating beyond 2017 is nearing completion.
"We're in a position now to just kind of put the final touches on some of the discretions and negotiations going forward," Ken Bradstreet, the director of community and government affairs with Wolverine Power Supply Cooperative Inc., said Tuesday. "We anticipate that, in all likelihood, we will have an agreement to present to our respective boards of directors here well before the end of the year."
Bradstreet and Rod Miller, We Energies' local affairs account manager, spoke during the closing segment of Tuesday's 2012 Upper Peninsula Energy Summit in Marquette.
Officials on Tuesday said a deal to allow the Presque Isle Power Plant to remain open is nearing completion. We Energies officials announced last year that the plant, seen here, would likely be closed by 2017 in the face of more stringent federal pollution standards. Since then, the company has been working to establish a joint venture with Wolverine Power Supply Cooperative in an attempt to keep the plant running in the long term. (Journal photo by Matt Keiser)
For the better part of a year, representatives from Wolverine and We Energies have been working toward a joint venture related to the future of the local coal plant. Those talks were spurred initially by We Energies' announcement last October that the company would likely close the Presque Isle Power Plant by 2017, due to impending federal pollution standards.
Miller said Tuesday that many pollution controls had been implemented at the plant in recent years, and the facility would be able to meet most impending pollution limits. The new National Ambient Air Quality Standard related to sulfur dioxide, however, is set to become 50 times more stringent in 2017, and would pose a problem, according to Miller.
"That is incredibly problematic for us, as the owner of that facility," he said.
According to Miller, We Energies last year considered a number of options - including retrofitting the plant to utilize natural gas as a fuel source and replacing the shuttered plant with a new one - but ultimately decided the most economical option would be to close the plant and supplement the U.P. power grid with additional generation from other areas.
"Retirement was not only a very real possibility, it was a likely outcome," he said.
It was then that Wolverine - a power generation and transmission cooperative headquartered in Cadillac - stepped in. Wolverine supplies power to five distribution electric cooperatives and two alternative electric suppliers in the Lower Peninsula, and has recently purchased plants in downstate Belleville, as well as in Gallipolis, Ohio, and Madison, Ind.
Bradstreet said a joint venture related to the Marquette plant would be "the right fit" for Wolverine, as it would allow the company to diversify its power generation base with an additional coal plant and would fit in well with Wolverine's goal of providing power to customers in rural Michigan.
He said any agreement would likely see We Energies contributing the Presque Isle Power Plant, while Wolverine would fund all costs to upgrade the facility in-line with approaching federal pollution standards.
The plant would then be jointly controlled and Bradstreet estimated that ultimate ownership would be 60-40 in favor of We Energies.
Bradstreet and Miller said that, pending a final decision on the joint venture, the companies would seek permitting and approvals in 2013 and construction would take place in 2014 and 2015. Ideally, the plant would begin operations in January of 2016 with all pollution controls in place.
The Presque Isle Power Plant - which was built from 1955 to 1979 - currently employs about 170 people and the city of Marquette receives about $1.5 million in tax revenue from the plant annually.
Kyle Whitney can be reached at 906-228-2500, ext. 250.