We Energies seeks PSC permission to build $1.2 billion natural gas power plant in Oak Creek

We Energies expects to have a new $1.2 billion natural-gas powered generating plant online in Oak Creek in about four years.

The Milwaukee-based utility filed proposals with state regulators on Friday to build the 1,100-megawatt plant, a smaller natural-gas generating facility near its Paris solar farm and 33 miles of gas pipelines to supply the new installations and a previously proposed liquefied natural gas storage facility in Oak Creek.

In all, the proposals outline about $1.8 billion in spending, all of which requires approval from the Wisconsin Public Service Commission.

A breakdown of We Energies' $1.8 billion investment in natural-gas generation

According to filings with the PSC, the spending includes:

• $1.2 billion to build a new natural-gas generating plant on land south of Milwaukee that today includes the Oak Creek Power Plant and Elm Road Generating Station. The plant would consist of five, 220 megawatt General Electric turbines, giving it about the same capacity as the Oak Creek plant, a coal-burning plant that We Energies will begin retiring this year. The company expects the plant to be complete in late 2027 or early 2028.

• $280 million to install seven 18.8 megawatt reciprocating internal combustion engines near the company's Paris Solar Farm in Kenosha County. The 128 megawatt installation is expected to be complete in 2026.

• $180 million to build 33 miles of gas pipeline connecting the Oak Creek and Paris installations to existing natural gas infrastructure.

• About $200 million to build a liquefied natural gas storage system on the site to ensure an adequate fuel supply for the new generating plant, natural gas customers, and the eventual conversion of the Elm Road Generating Station from coal to gas.

More: As We Energies readies to close its Oak Creek coal plant, it's planning a new gas plant on site

Are these new natural gas facilities replacing the Oak Creek coal plant?

While they will be built at the same time that the Oak Creek coal plant is being taken offline, We Energies officials said the natural gas facilities will serve an entirely different purpose.

The Oak Creek coal plant is an everyday contributor to customers' electric power supply, one that is being replaced by solar and wind power. By contrast, the new facilities are designed to be "dispatchable" ‒ easily and quickly turned on or off to fill in gaps in renewable energy generation and to ensure that the utility has adequate capacity to meet peak demand, both locally and regionally.

Why is We Energies building natural-gas plants if the trend is away from fossil fuels?

The company continues to invest in solar, wind and battery power and has outlined $6.8 billion in spending that will add 3,800 megawatts of new renewable energy in the next five years, more than quadrupling its carbon-free generating power.

However, natural gas is also seen as a bridge to a zero-carbon future, one that We Energies says is the most reliable and least costly way to fill gaps when renewable resources aren't at capacity, at times of peak demand and to be available for emergencies. At the same time, the application states that the additional capacity will be needed to help meet fast growing demand in southeastern Wisconsin, including big energy users like Microsoft's data center development in Mount Pleasant.

"Given these factors and the significant and high load factor additions planned, the applicants mustseek a combination of resources that can ensure the energy needs of the customers are met at all times," the PSC application states.

The push to build more dispatchable resources is supported by state and federal energy agencies that have sounded alarms about the current energy mix's ability to meet growing demand and to continue to provide power during severe weather and extended periods with light winds or limited sunshine.

More: We Energies plans $335 million investment to power to Microsoft's Mount Pleasant data centers

Environmentalists take issue with the embrace of new natural gas plants

Clean energy advocates see the We Energies proposal as a step backward that will make it harder to meet state and federal goals to attain net-zero carbon by 2050.

Rather than invest in new fossil-fuel powered electricity generation, the utility should invest more heavily in programs to reduce energy consumption and accelerate its development of solar, wind and battery facilities, said Cassie Steiner, senior campaign coordinator for Sierra Club- Wisconsin Chapter.

"As we transition to renewable energy, the only thing that's going to get us there is actually building renewable energy. More fossil fuels won't get us to clean energy," she said.

Consumers will pick up the cost of the new gas plants

In addition to the new proposals, We Energies also plans to convert the Elm Grove Generating Station from coal to gas, resulting in a total of about 3,000 megawatts of new gas-fired generating capacity in the next decade.

We Energies' stockholders will reap a return on those investments, but residential customers, whose bills increased nearly 14% in the past two years, will pay the construction costs over the next several decades.

That's why the Citizens Utility Board of Wisconsin will want the PSC to closely review the assumptions that underlie We Energies' proposals and ensure that no more is spent than necessary, said Tom Content, the consumer watchdog group's executive director.

Content said CUB recognizes that natural gas will continue to play a role in the transition to renewable energy, but wants to ensure that the construction plan doesn't result in excess capacity or facilities that will be retired well before the end of their anticipated 30-year lifespan.

"There's just an inherent bias to build, versus to look at other ways to meet demand," he said. "That's why we have to be skeptical and ask tough questions about whether it's needed."

Why build a new natural-gas generating plant in Oak Creek?

According to documents filed with the PSC, the Oak Creek site has two major advantages:

• It can be more quickly and easily connected to the electric grid, reducing the time to connect from as much as three years to as little as six months and significantly reducing the cost.

• It allows We Energies to build on a brownfield site that is already secure and staffed.

This article originally appeared on Milwaukee Journal Sentinel: We Energies seeking to build $1.2 billion natural gas power plant in Oak Creek