Dive Brief:
- DTE Energy will purchase the 732 MW Renaissance Power Plant in Michigan from LS Power Group for $240 million. The transaction is expected to complete in the first quarter of next year.
- The deal will allow DTE to address current and future resource needs, meeting the peak demand of approximately 260,000 households while seeking to lower the cost of a tightening power supply market.
- Power produced by the simple-cycle gas facility will be significantly cheaper than the cost to construct a new plant, DTE officials said.
Dive Insight:
"The purchase of Renaissance Power provides DTE customers with a safe, affordable, reliable and clean generation resource at a cost that is significantly below new build," said Jerry Norcia, DTE Electric's President and Chief Operating Officer. "Tightening supply markets for electricity in the region are expected to cause prices in the state and region to rise and become more volatile. This acquisition helps protect our customers from these dynamics."
Earlier this year DTE began commercial operations at its 110-MW Echo Wind Park.
Chairman and CEO Gerard Anderson, in the company's earnings statement last month, said DTE Energy is committed to providing 10% customer power from renewable energy sources by the end of 2015.
"We expect renewables and natural gas to play a substantially expanded role in future electricity production," Anderson said. "Recently proposed EPA carbon regulations would lead to replacement of a large portion of DTE's coal generation plants over the next decade."
DTE Energy operating units serving 2.1 million power customers in Southeastern Michigan and 1.2 million gas customers in Michigan.