We Energies would double its share of the natural gas power produced by Alliant Energy’s West Riverside Energy Center in Beloit, according to a proposal now under review by state regulators.
The $94.5 million purchase of 100 megawatts of the Beloit electric generating plant’s capacity would be We Energies second purchase of West Riverside Generating capacity since Alliant opened the $670 million plant in 2020. The first 100 megawatt sale was approved by the state Public Service Commission in March.
The PSC on Thursday launched a docket to review We Energies’ acquisition of additional capacity at the natural gas-powered plant and a smaller 25 megawatt purchase by Madison Gas and Electric for $24.2 million.
The proposed purchase comes at a time of transition in We Energies’ power-generating portfolio as it prepares for the shut down its coal-powered Oak Creek Power Plant and nears completion of 600 megawatts of solar power at three Wisconsin sites. The company has said natural gas needs to be part of that transition because it can be tapped when needed to fill in gaps at times when renewable resources aren’t producing enough power to meet demand.
“This purchase is part of our generation reshaping plan to reduce emissions and provide customers affordable, reliable and clean energy,” the company said in a statement.
Alliant’s Wisconsin Power & Light subsidiary will continue to operate the plant, and will retain ownership of about 56% of it when the purchases are finalized. Smaller shares of the plant are also owned by three cooperative utilities.
The utilities’ options to buy part of the 727-megawatt plant date to the 2015 settlement of a dispute between the utilities over whether the West Riverside expansion was needed and if it was the most cost effective way for Alliant to add generating capacity as it began its transition away from coal. We Energies, which had recently completed construction of its Elm Road Generating Station in Oak Creek and had excess generating capacity, argued it could less expensively sell power to Alliant.
We Energies’ sister company, Wisconsin Public Service Corp. exercised the first option on West Riverside. The utility’s parent company has since decided that capacity as well as the new purchase would go to We Energies changed as it became clear that We Energies would have a greater need for the power, the company said.
In the application to the PSC, We Energies states that the purchase of West Riverside capacity is an important element of its “Generation Reshaping Plan,” that includes coal plant retirements, investments in wind, solar and battery storage and development of on-demand natural-gas generating plants. The plan outlines how the company will work toward becoming carbon neutral by 2050.
Four coal-powered generating units at Oak Creek Power Plant, totaling 1,100 megawatts, are scheduled to shut down between May and the end of the 2025, but that schedule is dependent on approval of its purchase of West Riverside, according to the application.
“Not allowing Wisconsin Electric to acquire the second 100 MW tranche of West Riverside would force the company to reconsider the schedule for retiring the Oak Creek units, potentially keeping them in operation longer, requiring additional capital investment, and leading to greater CO2 emissions,” the application states.
Buying West Riverside would cost We Energies customers millions less than buying the same amount of power from Alliant, the application states.
Tom Content, executive director of the Citizens Utility Board, said his organization doesn’t have a firm position on the proposed sale. However, he said, CUB plans to intervene in the case to try to ensure the sale is the best deal for all of the utilities’ customers – making sure the purchases best fit the long-term needs of the buyers and also those of Alliant, which is expected to make additional investments in natural gas-powered generation in the future.
“The goal is always to have the most cost-effective portfolio, looking ahead for decades,” he said.
Read More: We Energies looks to double stake in Alliant’s West Riverside natural gas plant