Cloverland Electric preparing to pay $11.7 million surcharge

SAULT STE. MARIE — Cloverland Electric Cooperative members are now facing an $11.7 million surcharge or $835,000 per month for 14 months to pay for the 2014-15 operating costs for the Presque Isle Power Plant in Marquette. Wisconsin Energy announced the plant would close after losing its largest customer, the two iron ore mines near Marquette, who chose a different electric supplier
in 2013 under the state’s Customer Choice law. Wisconsin petitioned the Federal Energy Regulatory Commission (FERC) to have the electric utilities in the Upper Peninsula (UP) cover the costs to keep the plant open to maintain electric reliability in the UP. FERC agreed and allocated the approximately $60 million in costs back to the electric utilities in the UP. Cloverland’s
portion is $11.7 million and will be invoiced soon.

“This decision is very frustrating since over the years, we have not benefited from the power plant,” states Dan Dasho, Cloverland’s President and CEO. “We and other organizations in the UP are challenging this decision, but we have to prepare now to collect and pay this amount.”

Cloverland Electric members and other ratepayers in the UP could face an even more devastating surcharge in the future if one sentence in Senate Bill 437 is not removed now while the energy legislation is under debate in Lansing. The Governor’s office and the Legislature are resisting the request to remove this one sentence. The sentence allowed the ore mines to move 100 percent of their electric load to an alternate electric supplier (AES) while other large industrial loads were capped at 10 percent. If the ore mine exemption remains, and if the mines exercise customer choice again, then Cloverland Electric members could be held financially responsible for the new gas-fired power plant planned to be built in Marquette by 2020 that could cost more than $300 million.

Cloverland Electric members are encouraged to contact Senators Schmidt and Casperson, Representative Chatfield and the Governor’s office. The message is simple: “Cut out the ore mine exemption in Senate Bill 437. That exemption has cost Cloverland Electric members $11.7 million that we cannot afford.”

Cloverland Electric Cooperative is a not-for-profit, member-owned utility located in Michigan’s Upper Peninsula. It serves over 42,000 homes and businesses in Chippewa, Delta, Mackinac, Luce, and
Schoolcraft counties.