2017-11-02 / News

New Natural Gas Power Plants Slated for Upper Peninsula in Baraga, Negaunee

The Michigan Public Service Commission approved Wednesday, October 25, plans to build two new Upper Peninsula natural gas-fired power plants, costing about $277 million, in Baraga and Negaunee townships.

The Upper Michigan Energy Resources Corporation (UMERC) will build the plants, which will generate 183 megawatts of power and are intended to help maintain electric reliability. Construction will begin next spring and should be finished by 2019. The plants will replace the Presque Isle Power Plant (PIPP) in Marquette, which will close by 2020.

Tilden Mining Company will be the biggest customer, using about 40% of the power generated. Both plants are expected to operate for 30 years.

The project has taken years to develop and initially was brokered in 2015 when the state negotiated a deal to have the Tilden Mine return to purchasing power from Wisconsin

Electric Company. The Governor’s Office, Michigan Attorney General, and Michigan Agency for Energy worked with the Wisconsin company to reorganize and form UMERC in 2016.

The project, Governor Rick Snyder said, puts “Michiganders in charge of Michigan’s energy future. Upper Peninsula residents can now move forward with a solution that allows them to control more of what happens with their energy supply.”

Michigan Public Service Commission

Chair Sally Talberg said the new plants will fulfill a great need for electricity to customers in the Upper Peninsula, although the plants will only serve customers near Marquette. Electricity in the U.P. is more expensive than elsewhere in the state, she said, largely because the 300,000 customers served here are scattered across a large geographic area. The new plants will help reduce electricity costs for U.P. customers in the longrun, she said.

“This clean, efficient generation will significantly reduce emissions of mercury and other pollutants compared to the coal plant it will replace,” Ms. Talberg said. “And it is adaptable to the changing energy needs of the region, whether that is helping to serve a growing customer base spurred by economic development, providing a foundation for adding renewable energy, or investing in ways to cut energy waste in homes and businesses.”

The commission also approved a special contract with Tilden Mining paying for half of the cost of the plants. Specifically, the agreement allocates to the mine half of the capital cost of the power generators, all the fixed operations and maintenance, and the variable operations and maintenance expenses for the energy used to meet Tilden’s daily power needs. The other 36,500 UMERC customers who receive power from the new plants will pay the remaining 50% of the cost, said Judy Palnau the strategic communications manager for the Michigan Agency for Energy.

The sites of the new plants were chosen because of their proximity to natural gas pipelines, electric transmission lines, and roads.

The project will employ about 300 people during construction, about 200 at Negaunee and about 100 at Baraga. UMERC expects 60% to 80% of the construction workers will be from Michigan, hired from local building trades unions. Once operational, the plants will employ about 12 people.

The public service commission also approved two new gas pipelines for SEMCO Energy Company that will serve the plants. The Baraga Pipeline will run 4.5 miles from the Northern Natural Gas Company eight-inch pipeline to the new Baraga Township plant. The pipeline will run through a Michigan Department of Transportation rightof way along M-38 and on UMERC property. The Negaunee Pipeline will run 2,000 feet from an eightinch Northern Natural Gas pipeline to the new Negaunee plant. It will be located on UMERC property and won’t affect wetlands.

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