LANSING (AP) — A mining company has agreed to buy power for 20 years from a utility that plans to build two new natural gas-fired plants in the Upper Peninsula, a deal that Gov. Rick Snyder said Monday would provide the region with affordable, reliable electricity that generates less pollution.
Cleveland-based Cliffs Natural Resources announced a 20-year purchase agreement under which WEC Energy Group of Milwaukee will supply the Tilden iron ore mine with power. The deal, which follows earlier agreements announced in 2015, keeps intact the planned closure of WEC’s coal-fired Presque Isle Power Plant in Marquette by 2020.
At full capacity, the Presque Isle plant can produce 365 MW. The two natural gas units would open in 2019 and supply 170 MW total. Their locations have not yet been determined, WEC spokeswoman Amy Jahns said.
The agreement, which was facilitated by the Snyder administration, is subject to regulatory approval by Michigan, Wisconsin and federal regulators.
“The solution being proposed today is extremely promising, especially given the ability to easily adapt to changing demands,” Snyder said.
His office said the new power plants would resolve long-term reliability concerns from closing the coal plant and prevent unnecessary additional costs for U.P. customers, who have faced uncertainty and already pay higher bills than in other parts of the state.
“Cliffs views this agreement as critical to sustaining and enhancing the long-term competitiveness of our Tilden Mine and we look forward to working with the state of Michigan and WEC Energy Group to ensure timely regulatory review and approval,” Cliffs Chairman and CEO Lourenco Goncalves said.
Allen Leverett, CEO of WEC Energy Group — whose subsidiaries We Energies and Wisconsin Public Service supply to U.P. customers — said the company was “delighted” to collaborate with Cliffs and the state of Michigan.
Snyder and executives from the companies plan to hold a media event later this week in the Upper Peninsula.