MARQUETTE - We Energies and Wolverine Power Cooperative announced today that the two companies will eventually take co-ownership of Marquette's Presque Isle Power Plant, securing the future of the plant.
Under the agreement made public this morning, the Cadillac-based Wolverine will invest $130 million to $140 million to retrofit the facility in line with impending federal environmental pollution regulations. In exchange, Wolverine will acquire a minority interest - likely between one-third and 40 percent - in the facility. We Energies will continue to oversee the operation of the plant.
In Marquette this morning, Gov. Rick Snyder joined top executives from each company to announce the deal. Snyder said he was pleased with the agreement, which will provide environmental benefits, in addition to securing the economic future of the Marquette area.
Allen Leverett, executive vice president of We Energies, speaks this morning during a press conference announcing a joint venture between his company and the Cadillac-based Wolverine Power Cooperative. Seated are, from left, International Brotherhood of Electrical Workers Local 510 Business Manager Brian Hart, Wolverine President and CEO Eric Baker, Gov. Rick Snyder and Marquette Mayor Johnny DePetro. (Journal photo by Kyle Whitney)
"We're just happy to help facilitate a good commercial relationship that's going to help people in the Upper Peninsula. I think it's an excellent partnership," Snyder said. "It's two well-established Michigan organizations coming together to work together for the benefit of our citizens. It's easy."
Eric Baker, president and CEO of Wolverine, said his company will not gain control of its share until the upgrades are completed.
"Wolverine's responsibility is to bring all of the capital to do this air quality control system project," he said. "When we're done, we will effectively trade that out for ownership in We Energies' plant."
Allen Leverett, executive vice president of We Energies, said the price tag is a bit lower than the companies had initially anticipated. Though less up-front work will be done than first thought, the companies hope to pave the way for future improvements, if necessary.
"We want to position ourselves not only well for this first round of requirements in 2017 and 2018, but have an upgrade path later," Leverett said. "You know at some point there will be additional requirements, so we want to be positioned for those."
Thirteen months ago, We Energies officials said the impending pollution regulations would likely result in the plant closing by 2017.
The deal should have no negative effect on ratepayers, according to Leverett. Baker and Leverett said the regulatory approval process should begin in January and could take up to a year. Construction should begin in 2014 to place controls on each of the plant's five coal-fueled units. The goal is for the project to wrap up in the spring of 2016, at which point Wolverine will take control of its minority share.
The Presque Isle Power Plant 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.