Coal-to-natural gas switching became a live issue for Wisconsin Energy's major utility, We Energies, with the decision Friday to switch a long-time coal-fired cogeneration facility serving downtown Milwaukee to natural gas. The Valley Power Plant is a 280 MW facility providing steam and electricity.

We Energies said it plans to file an application with the Wisconsin Public Service Commission (PSC) for approval to modify Valley Power to run on gas. If approved, the utility said the conversion could be completed by 2015 or 2016 at an estimated cost of $60-65 million.

As part of the conversion We Energies would eliminate about 50 jobs at the existing coal-fired cogeneration facility. There would be no layoffs and the utility said the impact on current employees would be "minimized through reassignments to other generation sites and through retirements and normal attrition."

Emissions at the plant have decreased significantly over the past decade, but company executives hinted lat year that the coal plant was a candidate for conversion (see Daily GPI, May 10, 2011).

"The Valley plant is our oldest coal-fired plant," Wisconsin Energy CEO Gale Klappa told shareholders at the time. "It's a late-1940s vintage plant and some of the plant was, I believe, also [built] in the 1950s. We've had significant environmental upgrades; we've invested a fair amount of money to improve the environmental performance of this plant, and today our Valley plant meets all of the federal standards set out by the Environmental Protection Agency. But we believe that over the next several years there will be a need as new environmental regulations become law and get proposed...to convert the Valley plant from burning coal to burning natural gas."

During more than half of a century, the Valley plant has provided steam to more than 450 commercial/industrial customers for heating downtown center buildings occupied by a range of end-users, such as Northwestern Mutual and the Marquette University campus.

Klappa said the company's latest analysis showed "converting the fuel source for the plant will reduce our operating costs and enhance the environmental performance of the units."

We Energies recently obtained approval from the PSC to upgrade an existing gas main in Milwaukee to meet the future needs of gas customers in and along the Menomonee Valley and to provide fuel for the cogeneration facility. The pipeline upgrade is slated to be completed in 2014.

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