Supply fears delay We Energies, Alliant Energy coal plant retirements

Wisconsin’s largest utilities will delay the retirement of three large coal plants, including the Oak Creek Power Plant, due to energy supply fears.

In separate statements Thursday, We Energies and Alliant Energy said the decision was made based on global supply chain and economic challenges along with a potential energy shortage in the summer of 2023.

The plants, in Oak Creek, Sheboygan and Portage, will be used largely during the days of highest customer demand, according to the utilities.

We Energies planned to shut down the Oak Creek plant in 2023 and 2024. The retirement of the first two units of the plant, built in the 1950s, will be delayed until May 2024.

Retirement of the second two units, built in the 1960s, will be delayed for approximately 18 months, until late in 2025, the utility said.

All units have been updated with “modern environmental controls.” The plant has a total capacity of 1,100 megawatts.

We Energies announced previously it would replace the plant with a $2 billion investment in 800 megawatts of solar power, 100 megawatts of wind power, 300 megawatts of natural gas power and 600 megawatts of battery storage.

We Energies president Scott Lauber said the company remains committed to achieving “aggressive environmental goals,” which include a 60% reduction of CO2 emissions from its power generation fleet by the end of 2025 and an 80% reduction by the end of 2030.

“The decision to postpone the retirement dates for these units is based on two critical factors: tight energy supply conditions in the Midwest power market and supply chain issues that will likely delay the commercial operation of renewable energy projects that are currently moving through the regulatory approval process,” Lauber said.

Madison-based Alliant Energy announced it was pushing retirement of the Edgewater Generating Station in Sheboygan from the end of 2022 to June 2025.

The two remaining Columbia Energy Center units in Portage will be retired by June 2026.

Alliant Energy co-owns the Columbia facility with Wisconsin Public Service Corporation, a subsidiary of WEC Energy Group, and Madison Gas and Electric Company.

Alliant said it is still on track to achieve a 2030 goal of reducing fossil fuel generation carbon dioxide emissions by 50%, from 2005 levels and expects to end coal-powered energy generation in Wisconsin by mid-2026.

Earlier this month, the Midcontinent Independent System Operator released a study forecasting the MISO region, which includes Manitoba, Canada and parts of 15 states including Wisconsin, could be facing a potential energy shortage for the summer of 2023.

David de Leon, president of Alliant Energy, said shifting retirement dates will help ensure multiple uncertainties can be met.

More: Six more solar farms approved for Alliant Energy in Central Wisconsin, enough to power 100,000 homes

More: Hotter weather, growing demand could mean rolling blackouts across the Midwest this summer, according to reports

Business and consumer watchdog groups, including the Citizens Utility Board and Wisconsin Industrial Energy Group, said delaying coal plant retirement makes sense considering the challenges the industry is facing.

But the groups questioned how the decision will affect customer rates. We Energies and WPS want to increase rates by $60 to $72 a year for the average residential customer starting in 2023.

We Energies could not immediately answer the question Thursday.

“The delay for the retirement of large power plants appears to be a prudent decision. We’ve all heard the warnings of the potential for reliability issues this summer in the Midwest,” said Todd Stuart, executive director of the Wisconsin Industrial Energy Group.”

But Stuart added now is a good time to raise questions regarding the speed and cost of the massive utility capital spend in Wisconsin because of “persistently high rates.”

“We will still need to address the problem of rate recovery for power plants that are about to be retired,” Stuart said. “The current total for all the ‘zombie’ power plants in Wisconsin is over $2 billion.”

Corrinne Hess can be reached at [email protected] Follow her @corrihess

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