Taking the Heat Off Wisconsin; Four New Power Plants Are Coming Online This Summer.

Taking the Heat Off Wisconsin; Four New Power Plants Are Coming Online This Summer.

May 29 - Milwaukee Journal Sentinel

Four new power plants costing more than $900 million will be online this summer to address Wisconsin's growing appetite for electricity.

At least in the short run, the unprecedented addition of new plants is expected to give businesses and homeowners some breathing space during prolonged stretches of hot weather. That comfort zone will be needed because two of the state's three nuclear power reactors are now unexpectedly out of service into June.

But beyond the challenges this summer, the need for power is expected to grow along with the state's population, and any advantages the plants bring are likely to be short-lived.

All fueled by natural gas, the new plants are in Madison, Kaukauna, Sheboygan Falls and Port Washington. Together, they will generate nearly 1,300 megawatts of electricity enough to supply nearly 650,000 homes, according to state Public Service Commission estimates.

The first of the new plants, Madison Gas & Electric Co.'s 150- megawatt facility on the University of Wisconsin-Madison campus, began generating power in late April, utility spokesman Steve Kraus said. The Kaukauna and Sheboygan Falls plants will be working by the middle of June, while Port Washington will be online later in July.

Construction of the new plants was part of the state's response to the power shortages and threats of rolling blackouts in the late 1990s. Those shortages came when the three nuclear reactors serving the state were out of commission during a hot summer, forcing utilities to ask state industries to turn off the power. Those companies were paying special rates in exchange for giving the utilities the chance to turn down the juice during periods of peak demand.

Regulators say that for now there is enough power to withstand a similar plant shutdown.

Seven-year outlook

Several small power plants have been built across the state, as well as a larger, 600-megawatt plant built by energy merchant Calpine Corp. near Beloit.

A seven-year energy outlook prepared last year by the Public Service Commission concluded that the state would be in the best shape it's been in for a long time this summer, but that demand would again begin to overwhelm supply toward the end of the decade.

Demand has continued to rise, as the state hit an all-time peak in August 2003. An abnormally cool summer last year meant no new records were set, but it's likely that a new all-time record could be set this summer, given an expanding population, a recovering economy and a normal-summer stretch of hot weather, industry observers say.

One concern continues to be the status of the state's nuclear plants.

As the summer months approach, the state continues to be without two of its three nuclear reactors situated southeast of Green Bay. Combined, the two reactors at Point Beach and one at Kewaunee contributed nearly one-fifth of the state's energy supply.

"We're in good shape. The big caveat is, when is Kewaunee going to come back?" said Bill Harvey, president and chief operating officer at Alliant Energy Corp. in Madison.

Alliant owns a small piece of Kewaunee, along with majority owner Wisconsin Public Service Corp.

Kewaunee has been out of service since February and is expected to resume operating in the first half of June after changes made to some plant systems are authorized by the U.S. Nuclear Regulatory Commission. The Point Beach Unit 2 reactor is being refueled and having its reactor vessel head replaced. The plant was expected to return to service Monday, but plant owner Wisconsin Energy Corp. announced Friday that the shutdown is now expected to extend "substantially beyond" Monday, based on unresolved issues with the Nuclear Regulatory Commission.

The addition of natural-gas generators gives the state more flexibility entering into the summer, said Dan Ebert, chairman of the Public Service Commission.

Another improvement since last summer: construction of another major power-line link to Illinois, he said.

"Having these gas units come on this summer should help, no doubt, because that will help protect against outages," said Charlie Higley, executive director of the Wisconsin Citizens' Utility Board.

Slowing demand

In the years to come, it's hard to tell how many new power plants will be needed.

Wisconsin Energy Corp.'s proposed $2.15 billion Oak Creek coal plants which would be the largest in the state remain the subject of a legal battle.

Also delayed: a Wausau-to-Duluth power line that will provide important transmission connections to other markets.

"Both of them are critical to meeting our needs" in coming years, Ebert said.

Energy demand has grown by an average of 2% to 3% a year, and that trend is expected to continue, according to projections of utilities and state regulators.

Opponents of the Oak Creek project have noted that demand has grown much more slowly than forecast in recent years. And some industry analysts say rising electricity bills are prodding users toward conservation.

Green Bay-based Wisconsin Public Service Corp. said conservation likely played a role in keeping electricity sales lower than expected in the most recent quarter.

Increased reliability has come with a price, as all of the recently built plants have been fueled by natural gas which is more expensive to burn as a fuel and has wild price gyrations. Of those under construction, only one, the WPS project near Wausau, would be fueled by coal.

Customer and environmental groups have questioned whether utilities are overbuilding, after having failed to add new power plants for decades. Building new plants has become more profitable thanks to laws passed in Madison since 1998.

Harvey disputes that, and notes the considerable angst in Wisconsin this year about rising electric rates.

"The least responsible thing for us to do would be to consciously overbuild, because of the price pressure," he said.