The Commission said the two reciprocating internal combustion engine (RICE) electric generation facilities are the most reasonable and prudent means of meeting the utility’s power needs.
The Upper Peninsula Generation Project (Case No. U-18224) is expected to provide a total of 183 MW of power from the two facilities, one in Negaunee Township and a smaller one in Baraga Township, to serve the Tilden Mining Co. and non-mine customers. Both electric generation facilities are expected to be in operation for 30 years.
“This new gas-fired generation is a critical piece in shaping the future of energy supplies in the U.P. – a future that is cleaner, more reliable and affordable for U.P. residents and businesses,” said Sally Talberg, Chairman of the MPSC. “The Commission appreciates all of the input provided by a diverse set of stakeholders on this important decision.”
The Commission today also approved a special contract with Tilden Mining. It allocates 50 percent of the capital cost of the RICE generators to the mine and all the fixed operations and maintenance as well as the variable O&M expenses for the energy used for meeting Tilden’s daily power needs.
UMERC said it plans to begin construction of both generation facilities in the spring of 2018 and commercial operation should begin at both sites by mid-2019. UMERC chose the two sites because of their proximity to natural gas pipelines, electric transmission, and roadways.
Construction employment is expected to be 300, with approximately 200 workers at the Negaunee Township site and about 100 at the Baraga Township site. UMERC said it expects between 60 percent and 80 percent of the construction employees will be Michigan workers hired from local building trades unions. Once operational, the two plants together are expected to employ a total of about 12 people.
Once construction is complete, UMERC said the Presque Isle Power Plant (PIPP) will close, ending the possibility of any new system support resource (SSR) payments to keep the plant running. Last week, the Federal Energy Regulatory Commission (FERC) cut by nearly $23 million the amount all ratepayers were required to make in SSR payments for PIPP. FERC next will decide how much money, if any, should be refunded to ratepayers.
The two RICE electric generation facilities will be fueled by natural gas from the Northern Natural Gas Co.’s interstate pipeline. The Commission today also approved requests by SEMCO Energy Co. to build two gas pipelines to serve the UMERC plants:
The Baraga Pipeline (Case No. U-18384) will run 4½ miles from Northern Natural Gas Co.’s 8-inch pipeline to Upper Michigan Energy Resources Corp.’s proposed A.J. Mihm Generating Station in Baraga Township. Most of the pipeline will be routed within a Michigan Department of Transportation right-of-way along M-38 with the remainder on UMERC property.
The Negaunee Pipeline (Case No. U-18385) will run 2,000 feet from an 8-inch Northern Natural Gas pipeline to UMERC’s proposed F.D. Kuester Generating Station in Negaunee Township. It will be located on UMERC property and won’t affect wetlands.
In August, the MPSC approved a settlement agreement to improve natural gas reliability by allowing SEMCO to build the nearly 43-mile Marquette Connector natural gas pipeline (Case No. U-18202), which will run between Wells Township and Marquette in Marquette County.
