SC Johnson & Son drops opposition to 1,230-MW coal-fired plant

Washington (Platts)--16Aug2005

In a letter published in nine newspapers across Wisconsin on Sunday, Fisk
Johnson, chairman and CEO of SC Johnson & Son, said the company was dropping
its opposition to a 1,230-MW, coal-fired power plant being developed by We
Energies.

The Wisconsin Supreme Court cleared the way for the two coal-fired Elm Road
units in June, overturning a lower court decision that rejected a permit for
the addition at We Energies' Oak Creek, Wis., plant. The court upheld the
Wisconsin Public Service Commission's decision to issue the permit to
Milwaukee-based We Energies.

On Nov 29, Dane County Circuit Court Judge David Flanagan vacated the
certificate of public convenience and necessity granted by the PSC in November
2003. The judge said that the application for the $2.15-bil Elm Road project
was incomplete when the commission deemed it complete Nov 15, 2002. Also, the
final PSC order was faulty on several counts, the judge ruled. But the supreme
court disagreed.

The first 615-MW unit is scheduled to be in service in the summer of 2009 and
the second similarly sized unit in 2010. The plant will use Powder River Basin
coal.

The suit was brought by Clean Wisconsin, an environmental group, Racine,
Wis.-based SC Johnson and independent power producer Calpine Corp.

While the company said it still believes construction of the plant is wrong
for the state, it will stop pursuing its legal challenges of the air and water
permits.

"Like many of you, I was disheartened when the Wisconsin Supreme Court
recently cleared the way for the construction of two-coal fired power plants
at Oak Creek near our homes and workplaces," Johnson wrote. "[M]y dad, Sam
Johnson, four years ago put himself in the unenviable role of opposing We
Energies' plan to build two new pulverized coal plants at Oak Creek. Dad
thought it was his duty as a member of this community to speak up and question
the wisdom of erecting outdated, polluting coal plants on the shores of Lake
Michigan -- a very delicate and important regional resource."

Johnson added that the utility's plan was "the wrong one and the wrong
direction for our time."

He claimed the plants will emit more than 20 tons of pollutants each year and
draw more water from Lake Michigan than the entire Chicago metro area draws
every day for drinking. 

But We Energies spokesman Thad Nation told Platts Coal Trader on Monday that
pollution controls will be placed on the existing plant as well as the new
plant. "Emissions will be reduced 60% from where we started in 2002. They are
looking at part of the story; they aren't looking at the whole story."

Nation also said that while the plant will use large quantities of water,
99.9% will be returned. However, the cooling tower system that opponents had
advocated would have consumed 40-mil gallons/day. The plant "will return
virtually all water it draws back to the lake."

"The plants will further degrade our air quality in an area the US
Environmental Protection Agency has already declared a 'severe non-attainment
area.' This facility will compromise public health and cost ratepayers
$2.5-bil, more than other available, cleaner alternatives," Johnson wrote.
"Reasonable people can disagree about whether burning high pulverized coal and
using lake water for cooling are appropriate technologies for 2005 and beyond.
However, I think it's hard to disagree that the public is entitled to a
thorough, robust evaluation of this option as well as alternatives."

In the future, Johnson advocated building coal gasification plants or using
other cleaner technologies.

He called on the governor and legislature to improve the state's energy
regulatory process. "We must have laws that embrace new technology and move us
toward alternative energy sources that are cheaper, cleaner and safer."

Clean Wisconsin and the Sierra Club continue to challenge the plant's permits.

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