- Wisconsin Energy Wins Approval for Coal-Fired Power Plants near Milwaukee

Wisconsin Energy Corp. won the approval of state regulators recently to build two coal-fired power plants, at a cost of $2.15 billion, in the Milwaukee suburb of Oak Creek.

The first new coal-fueled plants to be built in Wisconsin since 1985, they will provide a total of 1,230 megawatts, enough to light 615,000 homes. Madison Gas and Electric Co. plans to be part-owner, receiving 150 megawatts, and will file for approval of its ownership plans within 30 days.

But the Public Service Commission turned down a third plant at the same site, saying the coal gasification technology Wisconsin Energy wanted to use in that plant is too expensive right now. Commissioners said, though, it holds a lot of promise for the future.

The Milwaukee utility company said little about the decisions. "It was a very interesting and thorough conversation," said Thad Nation, spokesman for subsidiary We Energies. "We'll just wait to see what the final order says." The final order is expected by Nov. 10.

MGE was more enthusiastic. "This decision today is a good one," spokesman Steve Kraus said. "It will allow MGE customers to continue to benefit from having a diverse fuel mix: coal, gas and renewables. That makes good economic sense."

The three-member PSC said that with electricity demand in Wisconsin projected to grow 2 percent to 3 percent a year for the next 10 years, new generation sources are needed.

"Faced with an aging fleet of coal plants and the need to have additional baseload generation to meet energy demands, the decision today will help fuel the economy and help Wisconsin businesses grow," chairwoman Burnie Bridge said after the meeting, in a written statement.

The PSC also pushed back the timeline for putting the coal plants into use from 2008 and 2009, as Wisconsin Energy had proposed, to 2009 and 2010.

Conditions on the plant construction include receiving air quality and water permits from the state Department of Natural Resources, submitting updated information on power demand before building the second unit, and seeking PSC approval for any significant cost changes.

The coalition that's led opposition to the coal plants, Responsible Energy for Southeastern Wisconsin's Tomorrow, or RESET, said it's disappointed with the PSC decision.

"More coal is no bargain for Wisconsin," said Marc Looze, who's also air pollution campaign director for the Madison environmental group Clean Wisconsin. "It's a burden on public health, the environment and consumers who will bear the added costs of coal in their energy bills, their medical bills and more."

MGE said the Oak Creek power plants will let the Madison utility end some of its contracts for electricity from Illinois. "More of this power will be locally grown, closer to home," making it potentially more reliable and less expensive, MGE's Kraus said.

The coal-fired plants are part of Wisconsin Energy's Power the Future proposal, which also includes building two natural gas-fired power plants at 545 megawatts each. The PSC already has approved that project.