Coal Loses in WEC Energy Generation Rebalancing

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--To better balance its generating resources and customer demand for electricity, WEC Energy Group Incorporated (NYSE:WEC) (Milwaukee, Wisconsin) announced plans late last year to retire about 1,800 megawatts (MW) of coal-fired generation and add about 350 MW of utility-scale solar and 180 MW of natural gas-fired generation by 2020.

WEC Energy Group operates electric utilities in Wisconsin and Michigan. It also operates gas utilities in Illinois and Minnesota. The company's two Wisconsin-based electric utilities are We Energies (Milwaukee, Wisconsin) and Wisconsin Public Service Company (WPS) (Green Bay, Wisconsin). Those two utilities plan to retire these coal-fired power plants over the next three years:

• We Energies' 1,190-megawatt Pleasant Prairie Power Station in the second quarter of 2018, pending approval by Midcontinent Independent System Operator
• We Energies' 350-MW Presque Isle Power Station by mid-2019
• We Energies' 100-MW share of Edgewater Generating Station Unit 4 by end of September 2018
• WPS' 200-MW J.P. Pulliam Generating Station in late 2018

This spring WEC's Michigan electric utility, Upper Michigan Energy Resources Corporation (UMERC) (Milwaukee), plans to begin construction of approximately 180 MW of reciprocating internal combustion engine (RICE) generation in Michigan's Upper Peninsula. One project, the F.D. Kuester Generating Station, will be about 128 MW. The other, the A.J. Mihm Generating Station, will be about 55 MW. Burns & McDonnell Incorporated (Kansas City, Missouri) is providing engineering, procurement & construction (EPC) services to both projects. Both projects are expected to be operating by mid-2019. In addition, the WPS unit is evaluating the future addition of adding 50 MW of RICE generation in Marinette, Wisconsin.

In an interview, WEC spokesperson Amy Jahns said the WPS unit plans to purchase about 200 MW of generation from a planned solar farm. The We Energies subsidiary plans to purchase about 150 MW of solar from a second solar farm. She said the projects to be built, the developers and their locations all were undetermined. Both projects are scheduled to be operating by 2020, she said.

"These steps are part of our generation reshaping," she told Industrial Info. "Right now, we have significantly more electric generation capacity that demand. With sustained low natural gas prices, dramatic reduction in renewable generation costs, particularly solar, and no near-term electric load growth, this plan is a way to better balance supply and demand."

In announcing its generation reshaping plan in late November, WEC said it was making plans to reduce power generation costs, reduce carbon emissions, preserve fuel diversity and maintain reliability. It said it "will work with industry partners, environmental groups and the state of Wisconsin to reduce carbon dioxide (CO2) emissions by approximately 40 percent below 2005 levels by 2030."

At the end of 2016, approximately 51% of WEC's electricity was generated from coal, Jahns said. About 24% came from natural gas and 25% came from carbon-free sources like solar and wind. By 2030, she predicted, WEC's generation mix will be one-third coal, one-third gas and one-third carbon-free generation.

"The steps the WEC Energy Group is taking is yet another demonstration of how low-cost natural gas and improving renewable generation technology are reshaping the nation's generation fleet," said Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "The Pleasant Prairie Power Plant came online during the Reagan administration, and it received a $325 million environmental upgrade about a decade ago. But the industry's move toward cleaner, lower-cost energy, coal-fired generation is coming at the expense of coal power."

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