Upper Michigan Energy Resources Corp. is authorized to proceed with its preferred course of action, said Matt Helms, MPSC public information officer.

UMERC will rely on continued maintenance of its 10 reciprocating internal combustion engine units at the utility’s two natural gas-fueled power plants built in 2018 and 2019. The units replaced an aging coal-fired plant in Marquette. Combined, they have a total capacity of 183 megawatts.

The plan also calls for the utility to add 100 megawatts of solar electricity generation. The company says the new solar generation would reduce its reliance on renewable energy credits and replace potentially more volatile and higher-cost purchases of electricity from energy markets.

UMERC has about 42,000 customers in the central and western Upper Peninsula, including Alger, Baraga, Delta, Dickinson, Gogebic, Houghton, Iron, Marquette, Menominee and Ontonagon counties. Customers are billed by We Energies and Wisconsin Public Service, the two energy providers that served the area before UMERC formed in 2017.

Katie Thoresen/Wisconsin Public Radio photo

UMERC is a subsidiary of WEC Energy Group, the parent company of We Energies and Wisconsin Public Service, and is regulated by MPSC.

UMERC generates and purchases electricity from a mix of generation technologies, including nuclear, coal, natural gas and oil, as well as renewables such as hydroelectric, biomass, wind and solar. Its two main power sources are the two natural gas-fueled facilities — F. D. Kuester Generating Station in Negaunee Township and A. J. Mihm Generating Station in Baraga Township.

The Kuester plant generates about 128 megawatts of power while the Mihm station generates about 55 megawatts. They opened in 2019 with the retirement of the coal-fired Presque Isle Power Plant in Marquette, which had a generating capacity of 431 megawatts.

WEC Energy Group funded the entire $275 million project.

UMERC filed its application for approval of an integrated resource plan in October 2021. IRPs lay out an electric utility’s long-range forecasts for ensuring reliable service over the next 20 years, with specific requirements for reporting 5-, 10- and 15-year projections. IRPs were established under Michigan’s 2016 energy laws and are required for each electric utility whose rates are regulated by the MPSC.

According to Helms, some other terms of the IRP settlement agreement include:

— UMERC’s energy waste reduction goal of 1.5% for the next three years, not including Tilden Mine in Marquette County and self-direct customers, is deemed reasonable and prudent.

— UMERC agrees to incorporate MPSC staff recommendations into its next IRP, including energy waste reduction sensitivities, evaluating demand response modeling, investigating ways to increase energy waste reduction, performing a more robust risk assessment, providing additional transmission analysis, evaluating the benefits of energy storage, and providing additional opportunity for public comment.

The Michigan Department of Attorney General, Citizens Utility Board of Michigan and Savion LLC intervened in the case. MPSC staff also participated.

A public hearing on UMERC’s plan took place in January at Bay College West in Iron Mountain. At that time, it was estimated the addition of 100 megawatts of solar generation would add about $26 million in incremental costs for UMERC, potentially representing about a 7% increase in the energy charge portion of a residential customer’s bill.

While no large-scale solar projects have been announced, the Michigan Department of Natural Resources has proposed converting the decommissioned Groveland Mine in Dickinson County into a 300-acre solar farm. In September 2020, Circle Power of Royal Oak was awarded a five-year land lease agreement with the DNR to develop a large-scale solar array on the former mine site.

Meanwhile, on June 23, We Energies announced that it would extend the operating lives of four coal-fired units at its Oak Creek, Wis., site.

“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,” We Energies president Scott Lauber said.

We Energies had planned to shut down its plant in Oak Creek starting next year. That has been pushed out until 2024 and into 2025.

The company remains committed to achieving aggressive environmental goals, including a 60% reduction of carbon dioxide emissions from its power generation fleet by the end of 2025 and an 80% reduction by the end of 2030, Lauber said. Both measures are compared with a 2005 baseline.

“Because we plan to operate the older units at Oak Creek largely during the days of highest customer demand, we’re confident that we can remain on track to achieve these industry-leading targets,” Lauber added.

In Wisconsin, We Energies serves more than 1.1 million electric customers as well as 1.1 million natural gas customers.