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Frank A. Douglass Insurance Agency

New Power Plants Will Not Increase Energy Bills, UMERC Says

Two new natural gas burning power plants are being proposed to be built in the Upper Peninsula.

These power plants would produce 180 megawatts of power with 130 of those units coming from a plant to be built in Negaunee Twp. and the remaining 50 coming from a plant in Baraga Twp.

These plants would replace the power generated by the Presque Isle Power Plant, which would then be retired.

A controversy arose when an Illinois-based energy solutions company called Glidepath Development criticized the proposal claiming they were shut out of the process and that the new power plants will result in higher rates for an area already feeling gouged when it comes to electricity bills.

Upper Michigan Energy Resources Corporation (UMERC) General Manager Richard Rayburn disputes both of these points.

He addresses the claim that the Tilden mine would use 65 percent of the power generated but only pay 27 percent of the rate-based cost of the project.

Rayburn said, “And that’s just simply not true.  Our project cost is going to be about $270 million or so, and UMERC would pay that cost and recover 50 percent of that cost from our agreement with Cliff’s Tilden Mine.  The other 50 percent would be recovered from UMERC customers, but those costs will be offset by the closing of the Presque Isle Power Plant.  So for our projects, there will be no cost increase for any other customers in the U.P. for electricity.”

Rayburn also said that Governor Rick Snyder and the State of Michigan announced in 2015 that they were accepting proposals for new power generating solutions.

Rayburn said, “Any company out there, or entity that produces power, had an opportunity to submit a proposal to meet the governor’s call to action and no one did.  The only company that stood up and submitted a proposal was UMERC.”

The proposed power plants still need to be approved by the Michigan Public Service Commission (MPSC).

If approved, they are expected to be up and running by 2020.

You can hear the entire interview with UMERC on this week’s episode of Copper Country Today.

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