Bill Skewes of the Wisconsin Utilities Association argues that “a bit of perspective is in order” regarding potential legal and regulatory delays related to the proposed new coals plants in Oak Creek (WisOpinion 2/09/05).
Mr. Skewes is correct in pointing out the importance of making sure that Wisconsin’s energy industry can continue to provide customers with reliable, affordable energy. He errs, however, when in infers that the state’s energy industry is limited to the paying membership of the Utilities Association.
In fact, no company has built more new generation for Wisconsin than Calpine over the last 20 years. We aren’t a household name because we don’t have retail utility operations, but we produce a significant percentage of the state’s electric power. In fact, we provide energy to most members of the Utilities Association. We are, therefore, a very important part of the state’s energy industry.
With respect to Oak Creek, it is simply a fact of life that new power plants can be controversial, and some are inherently more controversial than others. Despite its many supporters, We Energies’ proposal in Oak Creek also has a number of adamant opponents.
Other large generation projects, however, are already well underway. These include: Wisconsin Public Service Corporation’s Weston Unit 4, near Wausau; We Energies’ new plant in Port Washington; and Calpine’s Fox Energy Center, in Kaukauna. All of these are now under construction. And Calpine’s Riverside Energy Center, in Beloit, entered full commercial operation last year. Each of these new plants represents an important addition to the state’s energy infrastructure and will support a growing economy.
It is not fair for utilities to blame interested parties for expressing their views or exercising their legal rights in the regulatory process. Public interest groups, concerned citizens, and competitors all play an important role in the debate, and often express legitimate—and constructive—perspectives on important issues.
We can understand why the Utilities Association is frustrated with the pace of progress at Oak Creek, but Mr. Skewes misses the mark in criticizing Calpine for pointing out that our Fond du Lac project can be an important part of the solution.
To be clear, Calpine’s goal is not to block new coal plants. We are in this debate to convince We Energies and the Public Service Commission to embrace the concept of competitive wholesale markets for electric power. A competitive procurement process is clearly a more rational and efficient approach than having to rely on contested regulatory proceedings and litigation.
In the context of the Oak Creek review, we presented the Commission with a competitive alternative that would include our Fond du Lac project in the mix of plants that could meet We Energies’ power needs. Based on its technical analysis, the PSC determined, as reflected in its Environmental Impact Statement, that an energy mix including Calpine’s Fond du Lac project—as well as new coal capacity at Oak Creek—would be cheaper and cleaner than We Energies’ coal plants alone.
In other words, the agency’s professional staff and computer modeling efforts showed that the best energy future for Wisconsin included both new coal plants and new gas plants, as well as the ongoing development of renewable energy resources.
Calpine has made a $1.4 billion investment in 2,060 megawatts of new power generation for Wisconsin. These new plants have helped prevent serious electricity shortages in recent years. Plus, they support the same types of quality jobs and local economic benefits as when a utility builds a new power plant. For instance, more than 500 construction workers are currently working on our Fox Energy Center in Kaukauna. They would love an opportunity to help us build our plant in Fond du Lac as well.
The bottom line is that Wisconsin needs our $350 million Fond du Lac plant as well as new coal generation. If We Energies’ plans are delayed, and if the state needs new generating capacity before the end of this decade, Calpine’s Fond du Lac proposal is one of the few realistic and affordable options to help keep the lights on while the controversy at Oak Creek runs its natural course.
By John Flumerfelt, Director, Government and Public Affairs, Calpine Corporation
EDITOR’S NOTE: This Column is a response to a column by Bill Skewes.
