MARQUETTE — With the Empire and Tilden mines buying power from the Presque Isle Power Plant again, Cloverland Electric has expressed its desire for plant owner We Energies to stop collecting System Support Resource payments through the Midcontinent Independent Systems Operator.
An Upper Peninsula Electric Co-Op is accusing an electric company of over collecting.
Cloverland Electric Cooperative released a statement saying that Wisconsin Energy, the company that currently owns the Presque Isle Power Plant, is collecting a profit from both the Tilden and Empire Mines and from a System Support Resource Agreement. The SSR agreement was put in place by the Midcontinent Independent System Operator (MISO) to keep the Power Plant running.
The Presque Isle Power Plant is currently in the process of being sold to the Upper Peninsula Power Co. (UPPCO). The sale is expected to be completed later this year.
Wisconsin Energy announced that it was going to close the Presque Isle Power Plant in 2014 after losing the mines as its customers in 2013. MISO prevented Wisconsin Energy from shutting down the Power Plant because of the electric reliability concerns it would create in the U.P.
According to Cloverland Electric, its customers could be paying $2.3 million a month until the sale of the Power Plant is completed.
Those payments were set up to keep the plant — and the U.P.’s electrical reliability — up and running after the mines initially took their business elsewhere in 2013. We Energies maintains that the SSR agreements need to remain in place to protect their other customers from incurring additional costs given that Cliffs Natural Resources has no current long term agreement with the company.
“It really is there to help protect the other customers that would remain if in fact, let’s say a month or so from now, the mines decided, ‘now we’re going to leave,’ and we took the SSR agreement off the table, now all of those costs for Presque Isle — because we would still be forced to run it — would likely be — would have to be paid by all of the other customers that remain,” said We Energies spokesman Brian Manthey.
Manthey added that We Energies has filed an argument with the Federal Energy Regulatory Commission saying that Cloverland Electric should not have to pay the extra money they would have to pay if the cost allocation for the SSR payments were changed. Current cost allocations are not yet set in stone.
“One thing to clarify, is all — any of those cost allocations to the various utilities in both Wisconsin and Michigan, those cost allocations have not been finalized, and in fact, the Federal Energy Regulatory Commission is still looking into how those costs should be allocated,” added Manthey. “Secondly, once we have reached that point where we complete the sale of all of our assets in Michigan, there will be another look at a reconciliation of those SSR agreements. So, while the SSR agreement stays in place, any money that we receive from the SSR agreements go into escrow, and then at some point there will be a reconciliation.”
The sale of the Presque Isle Power Plant to UPPCO is expected to be complete this summer. As part of that deal, Cliffs agreed to buy a majority of the mines’ power from UPPCO until the plant is closed around 2020.