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Midwest utilities plan retirements for coal, gas, biomass power plants

For reasons ranging from economic to environmental, three Midwestern utilities have decided to retire about 600 MW of coal, natural gas and biomass generation in Wisconsin and Kansas by the end of this year.

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Most of the units targeted in the region's latest generation plant shutdown are older coal and gas facilities owned and operated by Alliant Energy and Westar Energy. They most likely would be replaced by new natural gas-fired generation by Alliant and renewables in the case of Westar, company officials said Wednesday.

New Environmental Protection Agency regulations are driving the Alliant and Westar decisions to close 200 MW and 350 MW of coal and coal/gas generation, respectively.

DTE Energy's Stoneman generating station in Cassville, Wisconsin, is something of an outlier.


The 40-MW plant is being shuttered because of economics, according to DTE spokesman Scott Simons.

"It's because the price of natural gas is down," making biomass power less attractive, "and the costs of bringing materials into the plant have gone up," he said.

RENEWABLES TO REPLACE BIOMASS PLANT

Stoneman currently burns wood waste, but it began life as a 50-MW baseload coal plant in the early 1950s when it was built by Dairyland Power Cooperative of La Crosse, Wisconsin.

Dairyland sold the plant in the 1990s. In 2008, DTE, the largest electric utility in Michigan with more than 2.1 million customers, acquired the plant from Integrys Energy Group and converted it to biomass.

Although Stoneman is one of the largest biomass plants in the Midwest, Simons said its planned closing is not an indictment on burning wood and similar materials to produce electricity.

"It's just this focus on this particular plant," he said, noting DTE has other biomass plants in California and Michigan.

Dairyland spokesman Deb Mirasola said Stoneman's energy is expected to be replaced by renewables.

In June, Dairyland issued a request for proposals for 25 MW of solar generation, and those bids are under review.

"We've also added some megawatts of hydro earlier this year, and we continue to look at opportunities to diversify with additional renewables such as wind and solar," she added.

OLDER UNITS TOO EXPENSIVE TO MODERNIZE

Westar and Alliant cited more familiar rationale in explaining the demise of their older coal and gas generation.

The EPA's new Clean Power Plan played a role in the decision by Topeka, Kansas-based Westar to retire two coal units totaling just under 200 MW at its Tecumseh Energy Center and Lawrence Energy Center, spokeswoman Gina Penzig said. An older 176-MW gas plant at the Hutchinson Energy Center also will be closed.

"This equipment has served Kansas customers well for more than a half century, decades longer than ever imagined," John Bridson, Westar senior vice president of generation, said in a statement. "However, to invest the tens of millions of dollars to upgrade this equipment to keep it operating safely doesn't make sense. People are using less energy, so we no longer need these old, small generating units to meet peak electrical demand."

Alliant spokesman Scott Reigstad said two 100-MW coal units at the Nelson Dewey plant in Cassville will be retired in the coming two-plus months as they also are too old and inefficient to retrofit.

Two coal units representing another 300 MW at the company's Edgewater plant in Sheboygan, Wisconsin, will be retired in 2016 and 2018, respectively.

Replacing that generation, the company hopes, will be a new 650-MW gas plant at its Riverside Generating Center in Beloit, Wisconsin.

--Bob Matyi, newsdesk@platts.com
--Edited by Jason Lindquist, jason.lindquist@platts.com