PSC Directs Wisconsin Electric Power Company to Show Case Why Utility Should Not Be Prohibited From Retiring Presque Isle Power Plant

The Michigan Public Service Commission has directed Wisconsin Electric Power Company (WEPCo) to show cause why it should not be prohibited from suspension of operations or retirement of the Presque Isle Power Plant (PIPP).

The PSC's direction (Case No. U-17829) comes after two large mines have returned to WEPCo utility supply on February 1, 2015, after previously taking retail access, which prompted WEPCo to seek to retire the Presque Isle plant, followed by a reliability must-run contract with MISO to keep the plant in operation.

WEPCo's prior direct testimony in Case No. U-17213, "raised serious questions about the utility's ability to serve the needs of customers in the Upper Peninsula," the PSC said.

"Indeed, Wisconsin Electric specifically averred in Paragraph 7 of the application in Case No. U-17213 that '[t]hus, retiring the PIPP units without first significantly upgrading the transmission system in the Upper Peninsula or and/or installing appropriate replacement generation resources would violate reliability standards.'"

"The Mines returned to full requirements electric service provided by Wisconsin Electric on February 1, 2015, which raises even more serious concerns about the utility's ability to serve its customers," the PSC said.

"The law demonstrates that Wisconsin Electric has an obligation to serve the customers in its territory; but, at present, Wisconsin Electric is unable to provide the Commission with assurance of a reliable supply of electric service given it has announced its intention to retire the PIPP despite the Mines' February 1, 2015 return as customers of Wisconsin Electric. In particular, the Commission emphasizes that the urgent problem of constrained capacity in the Upper Peninsula will continue for multiple years. In light of the events described above, the Commission directs Wisconsin Electric to show cause in this docket why it should not be prohibited from suspension or retirement of the operation of the PIPP," the PSC said

The deal brokered by Gov. Rick Snyder addressing Upper Peninsula rate contemplates that Upper Peninsula Power Company, which would assume WEPCo's territory and ownership of the Presque Isle plant, would continue to operate the Presque Isle plant until 2020.