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Electrical agreement represents much work, compromise

News was issued by Gov. Rick Snyder and Attorney General Bill Schuette Tuesday of a major development in the Upper Peninsula’s electric crisis. Four key agreements in principle were reached which would fit together interlocking pieces to resolve one of the most significant problems the region has faced in decades.

The agreements are focused on replacing the coal-fired Presque Isle Power Plant with new U.P.-based natural-gas-fired cogeneration power plant in Marquette County. We Energies would sell its U.P. assets and transfer its customers to the Upper Peninsula Power Co., resulting largely in one utility supplying electric power for the region.

Cliffs Natural Resources would become a customer of UPPCO, using power from Presque Isle until the new plant is ready to operate in 2020. At that time, the Presque Isle plant, built starting in the mid-1950s would close, rather than be expensively retrofitted to meet new federal carbon emissions regulations.

Under the agreements, UPPCO – with Cliffs as its major power consumer – would agree to operate the Presque Isle plant until 2020 without a subsidy from ratepayers, who have feared substantial increases to finance operation of the plant for We Energies.

Meanwhile, Michigan and Cliffs would remove their objections to a merger between Wisconsin Energy and the Integrys Energy Group. Objections had been filed because officials believed the new entity created would have too much market power to control the U.P. However, that concern would be removed with We Energies divesting itself from the region.

This is all fantastic news offering many potential benefits to the U.P., not the least of which is eliminating the increased electricity costs to residents and businesses.

There remain several questions to answer and additional measures may be taken to make the power situation even stronger, more reliable and affordable for the area’s ratepayers. However, this is a magnificent breakthrough.

We congratulate all those who worked together to make these agreements in principle a reality. We are certain this was a monumental undertaking between parties who were often at odds. We look forward to continued success as these entities move toward final agreements by the end of June.

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