Oak Creek power plant back on line

June 4, 2012

A We Energies coal plant in Oak Creek that had been out of service since last fall returned to full power late last week, a utility spokesman said.

The first of two new coal-fired power plants the utility opened in Oak Creek in recent years needed repairs because of problems that could have led to corrosion of a critical component, the steam turbine.

The plant, which opened in early 2010, was shut down in late September for an inspection and then repairs. It returned to service last week, said utility spokesman Brian Manthey. The inspection took place before a two-year warranty from contractor Bechtel Power Corp. was set to expire.

Bechtel and We Energies are now at odds over who's responsible for the problem, and the cost of the repairs hasn't been finalized.

The inspection revealed chloride deposits on the blades of the steam turbine, which required blades and other parts to be replaced.

Construction of the two power plants in Oak Creek was the most expensive building project in state history, costing about $2.35 billion. The two plants generate 1,230 megawatts of electricity, or enough to supply about 1 million homes.

We Energies owns about 83% of the plant, with WPPI Energy of Sun Prairie and Madison Gas & Electric Co. owning the remainder.

An inspection earlier this year found similar problems, though to a lesser extent, at the second new coal plant, We Energies said in a filing with state regulators.

Both plants are able to run at full power even with the chloride deposits.

We Energies will inspect that generator for more signs of problems during its end-of-warranty inspection this fall, Manthey said.

"We'll do a full investigation" then, he said.

The utility has already ordered turbine blades for the second plant, with an eye toward keeping the outage much shorter than the eight-month hiatus experienced with the first plant, Manthey said.

Both power plants are expected to be available when electricity use spikes during the hottest days of the summer.

The plants were built to meet growing demand for electricity after Wisconsin experienced power supply problems in the late 1990s. The new power plants led to big rate increases, giving We Energies the second-highest rates in the state.

Construction costs for the 2005-'11 coal plant project came in higher than the amount approved by the state Public Service Commission.

Auditors at the PSC are looking into the overruns, and customer groups are expected this fall to attempt to challenge how much of the overruns get passed on to utility customers when the agency sets new rates for 2013 for We Energies.

Excluding the cost of fuel burned in power plants, We Energies has told customers to expect rate hikes of 3.6% each year in 2013 and 2014. The jump in bills for residential customers would be higher in 2013 under the utility's plan.

Costs associated with the repairs won't be part of the electricity rate increase the utility is seeking for 2013 and 2014, Manthey said.

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