Michigan utility seeks bids to buy 900-kW Au Train

Upper Peninsula Power Co. issued a solicitation Feb. 2 for bids to purchase its 900-kW Au Train hydroelectric project on the Au Train River near Munising, Mich. Bids are due March 31.

UPPCO, a subsidiary of Integrys Energy Group Inc., operates Au Train in a modified run-of-river mode with winter and late summer/early fall drawdowns and a continuous discharge. The project’s average annual generation is 5,600 megawatt-hours.

UPPCO said Au Train needs significant modification to conform to Federal Energy Regulatory Commission requirements to withstand a probable maximum flood. Its FERC license (No. 10856) expires in 2037. UPPCO said the cost of modifying the dam, and predicted electricity prices, suggest the project is not competitive with other generating resources available to the utility.

While Au Train does not fit into UPPCO’s long-term supply plan, the utility said the project does generate carbon-free energy that could be of interest to a buyer who might be better positioned to realize value from the project. UPPCO said selling the project to an independent power producer is one option in lieu of petitioning FERC for approval to abandon the project and remove the dam.

“IPPs are allowed a different method of accounting for these projects,” Charlie Severance, Integrys Energy’s general manager of renewable and wholesale energy said. “It’s quite possible that an IPP could find the economics of the Au Train project would meet their needs.”

UPPCO said it is examining all its options for the project. It also is considering ceasing generation, removing the project from FERC’s jurisdiction, and transferring the dam to the jurisdiction of the state of Michigan. That could allow sale of the dam to an entity that would not use it to generate electricity.

UPPCO is offering the project, in Alger County, Mich., on an �as is� basis. The buyer would be responsible for all operating, maintenance, and compliance costs as well as any associated liabilities, beginning immediately upon closing of the sale. UPPCO said it expects the sale would be for a fixed price payable upon closing, which would follow receipt of all regulatory approvals.

Hydrologic study seeks more accurate probable maximum flood

UPPCO anticipates the buyer would be responsible for bringing the project into compliance with FERC requirements. The utility has identified and reported project deficiencies related to the FERC Dam Safety Division’s probable maximum flood criteria. It also commissioned an engineering consultant to perform a hydrologic analysis to determine a more accurate flow rate for the probable maximum flood at the site. That analysis will be made available to potential bidders in advance of the bid date.

Copies of the solicitation may be obtained by contacting Severance at the address below.

Expressions of interest are due Feb. 13, with a confidentiality agreement to be executed by Feb. 20. The probable maximum flood analysis is to be provided by Feb. 27. Site visits are planned March 11-17.

Proposals are due by March 31 to another Integrys Energy Group company, Wisconsin Public Service Corp., at the address below. The company intends to complete evaluating proposals by April 17.

For information, contact Wisconsin Public Service Corp., Attn.: Charlie Severance, General Manager-Wholesale Electric &Renewable Energy, 700 N. Adams St., P.O. Box 19001, Green Bay, WI 54307-9001; (1) 920-433-5716; E-mail: cwseverance@wisconsinpublicservice.com.

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