By Chris O’Malley

DTE Electric has won federal approval to acquire a 320-MW natural gas-fired peaking plant from its parent company to help it meet MISO Zone 7 resource adequacy requirements.

The East China peaking station is an indirect, wholly owned subsidiary of DTE Energy, the parent of DTE Electric.

The Federal Energy Regulatory Commission last week asserted that the deal won’t have an adverse effect on competition, saying it amounts to a transfer of generating assets between affiliated entities (EC15-138).

The East China facility was the only resource to respond to DTE Electric’s requests for proposals for simple-cycle generating facilities to meet its reliability requirements.

FERC said the RFP satisfied any concerns over cross-subsidization. “In the context of an acquisition of affiliated generation, a competitive solicitation is the most direct and reliable way to ensure no affiliate preference,” FERC said.

DTE Electric owns and controls about 13,479 MW of generating capacity, plus 4,000 miles of distribution lines. It is the provider of last resort for customer load in its territory.

The East China plant is authorized to make wholesale sales of energy and capacity at market-based rates.

Financial details of the acquisition were not specified.

Last fall, DTE Energy and Consumers Energy warned of a shortage of generation reserves starting next year, noting nine coal-fired plants in Michigan are set for retirement ahead of tighter air pollution regulations.

Consumer groups have accused the utilities of fear-mongering, saying further deregulation of Michigan’s electric market would help ensure the flow of additional power from elsewhere.