Upper Michigan Energy Resources (UMERC), a subsidiary of WEC Energy Group, started operations of two natural gas-fired power plants with a total capacity of 180MW, in the Upper Peninsula of Michigan.
UMERC had selected Burns & McDonnell to provide full engineer-procure-construct (EPC) services for the construction of the two power plants A.J. Mihm Generating Station and the F.D. Kuester Generating Station, which are powered by 10 natural-gas-fired Wärtsilä 18MW reciprocating engine generators.
The two new natural gas-powered generating stations will replace the company’s coal-fueled Presque Isle Power Plant which had also been retired the same day.
WEC Energy Group provided $275m investment for the project. Half of the investment is expected to be recovered through a 20-year agreement with Cliffs Natural Resources. The remaining half will be recovered by selling the electricity at retail rate.
The generating stations are expected to save UMERC customers nearly $600m in the next 30 years. The plants are expected to eliminate the need for additional transmission capacity along with upgrades, which could be required to support the aged Presque Isle Power Plant, had the plant been continued to operate.
WEC Energy Group president and CEO Kevin Fletcher said: “The new generating stations are good for our customers, good for business and good for electric reliability throughout the U.P. Closure of the Presque Isle Power Plant also helps achieve our goal of reducing carbon dioxide emissions by 40 percent, well ahead of our 2030 target.”
Closing down the Presque Isle Power Plant is part of WEC Energy Group’s larger plan to restructure its power generation fleet to balance reliability and customer cost with environmental costs. WEC Energy Group will plan further to use the retired coal plant site, as it continues to evaluate the potential uses for the property.
In January, WEC Energy Group acquired 80% stake in Coyote Ridge Wind Farm, which is under construction in Brookings County, South Dakota.
The 97MW wind farm will be powered by 39 of GE’s turbines and WEC has invested $145m for acquiring the stake. The company expects to be eligible for 100% bonus depreciation under the new tax rules. The transaction had also secured all the necessary regulatory approvals.