Dive Brief:
- We Energies wants to do a $25-100 million retrofit of its Oak Creek power plant to allow it to burn cheaper coal to try and cut operational costs.
- The retrofit would allow the plant to burn coal mined in the West, which is about 35% cheaper than coal mined in Appalachia, which the utility currently uses. The utility would use a blend of 60% western and 40% eastern coal, with the ability to use different percentage blends in the future as markets dictate.
- If state regulators approve the move, it could save customers about $16 million annually on their utility bills. A pilot scheme has resulted in $100,000-300,000 in savings per month.
Dive Insight:
Whether the Public Service Commission will approve the move remains to be seen.
"With construction costs already topping $2.3 billion and continued cost overruns into the tens of millions, this was already the most expensive coal-fired power plant in the state," said Kira Loehr of the Citizens' Utility Board. "This project, coming only a few years after construction was completed, will need to be carefully scrutinized before ratepayers are required to pay any more for this plant."
Environmental groups say the PSC should be looking to alternatives to coal, not to bolster it with cheaper fuel, as new EPA standards on CO2 and other emissions from power plants will soon come into effect.
"This switch to less-efficient coal takes the state in exactly the wrong direction," said Katie Nekola. Western coal burns less efficiently than eastern coal, creating more CO2 emissions to get the same amount of power. The price of coal in the eastern U.S. has risen on the back of foreign exports.