Utilities agree to $105 million settlement

WISCONSIN - Three Wisconsin utilities and two environmental groups have agreed to a $105 million settlement designed to improve water quality in Lake Michigan and move the state toward increasing its supplies of renewable energy.

Under the settlement, We Energies (WEC) of Milwaukee has also agreed to shut down by 2012 two older boilers at its Presque Isle coal-fired power plant in Marquette, Mich., and committed to build a 50-megawatt biomass-to-energy plant in Wisconsin.

The $105 million settlement was announced by We Energies, Clean Wisconsin and the Sierra Club. Also participating are Wisconsin Public Power Inc. and Madison Gas & Electric Co. (MGEE), the co-owners of the $2.3 billion coal-fired power plant under construction in Oak Creek.

Under the agreement, the environmental groups have agreed to stop their litigation opposing construction of the water intake system that We Energies will deploy to draw 1.8 billions of gallons of Lake Michigan water per day for cooling at the new power plant.

The pact gives the utility certainty that the plant can open without We Energies and its partners having to build costly cooling towers, We Energies spokesman Barry McNulty said. "We need to put this behind us, and we're just happy that we could reach this mutual agreement with Clean Wisconsin and Sierra Club and move forward," he said.

Here are highlights of the deal, some of which require regulatory approval:

- $100 million would be allocated for Great Lakes water quality, to address problems including invasive species, runoff pollution, toxic loadings and habitat destruction.

- $5 million would fund projects to reduce emissions linked to global warming, consistent with a recommendation of Gov. Jim Doyle's global warming task force.

- The utilities would seek to expand the state's solar energy by 15 megawatts.

- Another initiative would seek to invest in energy efficiency projects for public buildings in the state, another task force recommendation.

- All three utilities would agree to provide information to customers to help track utility greenhouse gas emissions.

"We think the settlement is the best possible outcome for this dispute," said Katie Nekola, energy program director at Clean Wisconsin. "It offers significant benefits for Lake Michigan, and it helps also protect ratepayers in the sense that it avoids further costly delays in getting the plant running, and also avoids expensive cooling towers."