Millions in Relief for Co-op Battling IOU

A Michigan electric co-op welcomed a decision by the Federal Energy Regulatory Commission that will shave millions off its share of the bill to sustain another utility's coal-based plant. But the battle isn't over.

Cloverland EC welcomes FERC’s decision to reduce its share to keep the Presque Isle Power Plant operating, but members still face millions in charges. (Photo By: Cloverland)

Cloverland EC welcomes FERC’s decision to reduce its share to keep the Presque Isle Power Plant operating, but members still face millions in charges. (Photo By: Cloverland)

Cloverland Electric Cooperative initially faced costs of $22 million to support Presque Isle Power Plant, which is owned by Wisconsin Electric Power Company, a Milwaukee-based investor-owned utility.

Wisconsin Electric was ready to close the 359-megawatt-capacity plant in the Upper Peninsula after a 2008 Michigan law allowed the two ore mines that account for 80 percent of its load to seek alternative energy suppliers.

But the Midcontinent Independent System Operator in 2014 directed that Wisconsin Electric keep the plant running for grid reliability. The mines subsequently returned as plant customers, yet the utility continued to levy millions of dollars in operating costs on Cloverland.

A federal administrative law judge petitioned by the co-op reduced Cloverland's share to about $12 million, and that will be cut further under an October FERC order that Wisconsin Electric refund more of the money it collected between 2014 and 2015 to run the power plant.

"Cloverland Electric is pleased with this order issued by FERC," said Dan Dasho, president and CEO of the co-op based in Dafter, Michigan. "We have been fighting this long and hard for our members, who should not be paying the millions of dollars demanded by Wisconsin Electric to keep Presque Isle in commercial operation."

"We view that order as a positive. Yet our concern is that it will still have a significant impact on Cloverland to the tune of $6 million to $7 million in terms of cost of that our members will have to pay," said Dasho.

Dasho said the FERC decision further concluded that all those paying the cost for reliability should be involved in discussions upfront. The regulators agreed with Cloverland that the co-op should have been part of the negotiation process rather than allowing the plant's operating costs to be determined by the IOU, he said.

"It took us getting involved at the level of FERC to challenge these costs," Dasho said. "We had to go to FERC and fight about cost that should have been part of the negotiation process."

Cloverland, which receives a large portion of its power supply from its own hydro unit, is also pursuing relief of these charges in federal court. There is no timeline when the court may act on the case.

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