Citing high construction costs and carbon dioxide emissions, the Public Service Commission (PSC) of Wisconsin last week denied a plan by Alliant Energy Corp.’s Wisconsin Power and Light (WP&L) to build a new 300-MW coal-fired electric generation facility.

The PSC unanimously decided that the $1.26 billion project was too costly when weighing it against other alternatives such as natural gas generation and the possibility of purchasing power from existing sources. Concerns over construction costs and uncertainty over the costs of complying with future possible carbon dioxide regulations were all contributing factors to the denial.

WP&L filed an application with the PSC for permission to build the new 300-MW coal-fired electric generation facility in early 2007. The utility identified two possible locations for the power plant: its Nelson Dewey Generating Station property in Cassville and the Columbia Energy Center in Portage.

Last week, the PSC acknowledged that WP&L’s effort to burn up to 20% renewable biomass at the Nelson Dewey site was laudable, but it found that the cumulative costs and risk associated with the project were unacceptable to the utility’s ratepayers.

“We are at a unique juncture in this country, and in Wisconsin, and decisions regarding new sources of electric generation need to account for the likely future costs of complying with constraints on carbon emissions,” said PUC Chair Eric Callisto.

“The costs of this plant in relation to its risk and the more affordable options currently available to Wisconsin Power and Light were important factors in my decision. Cheaper, cleaner options are out there, and I encourage the utility to move on them quickly. I look forward to reviewing other projects in Wisconsin that take advantage of the state’s biomass resource without the risk associated with this project.”

“Our company is extremely disappointed in the PSCW’s decision today and the opportunities lost with it,” said Barbara Swan, president of WP&L. “We will need to evaluate the PSCW’s decision prior to considering alternatives for our long-term generation growth strategy in Wisconsin.”

The PSC expects to issue its written order by December 15, 2008. The written order will provide additional details concerning the decision. WP&L will have twenty days from the issuance of the written order to ask the PSCW to reconsider its decision.

Sources: Wisconsin PSC, WP&L