FERC has opened hearing and settlement procedures into the more than half-billion dollars We Energies is asking customers to foot for the early retirement of the coal-fired Oak Creek Power Plant in Wisconsin.
We Energies requested to recover $510.5 million of unamortized investment for the Wisconsin coal plant through its wholesale rates (ER25-316). The company said it will retire the remaining two of Oak Creek’s four units — first started up in the mid-1960s — at the end of 2025, leaving an estimated remaining expected composite life of about 17 years and $698.7 million in unamortized plant balance. The company said it has a retirement reserve of approximately $188.2 million to offset the amount.
We Energies said that even with the ratemaking treatment, wholesale rates are set to decline about 2.7% with the coal plant’s retirement and estimated overall savings between $817 million and $1.7 billion for its customers. The utility said it “no longer expects [Oak Creek] to provide net economic benefits to its customers due to the current regulatory climate.”
The utility told FERC its decision to retire the plant early and seek cost recovery is on par with the commission’s 1996 Yankee Atomic decision, in which it allowed the owners of the Massachusetts nuclear plant full recovery of unamortized investments and operations and maintenance expenses even though it shut down prematurely. We Energies said Oak Creek has operated “safely and reliably for nearly 70 years prior to retirement, and that it has performed consistently and at a reasonable cost compared to other coal plants” in the U.S.
However, Cloverland Electric Cooperative argued We Energies’ estimated savings exclude the cost of new generation the utility will need to replace Oak Creek’s output. The cooperative also said We Energies’ assessment of Oak Creek’s remaining useful life is overblown because it relied on “stale data” from a 2012 depreciation study.
The commission said We Energies’ accounting request might be unreasonable but that it could not make a determination based on the filing and protests alone. It placed the rates into effect subject to refund and conditioned on the hearing and settlement outcome.
We Energies requested an effective date of Dec. 31, 2024, for recovery on Oak Creek Units 5 and 6, which were retired in mid-2024, and a Jan. 1, 2026, effective date to begin the amortization period for Units 7 and 8, which are planned to operate through the end of the year.
Units 1 to 4 were retired in the 1980s.
