We Energies won approval from state regulators Friday to build a biomass power plant in Rothschild. But there are some strings attached that could determine whether the project actually moves forward.
The state Public Service Commission wants to see evidence that the utility or Domtar is taking steps to mitigate some environmental contamination on the site where the plant would be built. Commissioners also changed a key contract to give We Energies the option of refusing to take the biomass plant or other assets if Domtar cancels the steam agreement rather than the requirement that it does.
“I don’t want WEPCO to be forced to take possession of this property if they don’t want to,” commissioner Lauren Azar said, referring to We Energies’ parent company as she proposed the change. “As long as everyone understands that the ratepayers are not going to hold the risk for any shortcomings.”
The commission approved another condition that Azar set which would require Domtar to pledge collateral, such as real estate or letters of credit, to match its $47 million capital investment.
“They’re needs to be some back up,” Azar said.
Commissioners also set a condition that the future of the project hinges upon, offering two choices that would increase the upfront costs for either the utility or Domtar.
The difference between the two options is that the first requires an additional $10 million investment from one of the two parties while the second would increase Domtar’s fuel costs.
Having the companies put more money up front “would ultimately decrease the cost to the ratepayers,” commissioner Eric Callisto said.
Callisto led the charge in negotiating which two options the two sides would receive. Both options give the commission limited jurisdiction over regulating fuel costs once the plant begins operation.
Senior executives from We Energies and Domtar began combing through the conditions over the weekend and will not comment on future plans until the final order is filed.
“Nothing’s been finalized yet because there have been some new items brought forward in the discussion,” We Energies spokesman Brian Manthey said. “You have to go through those and see what the ramifications would be before you can make a final decision whether the goes forward or not.”