A pair of Wisconsin utility companies have filed for regulatory approval to buy solar facilities totaling 300 MW from two major project sponsors.
The build-transfer deals, with Invenergy and NextEra Energy Resources, are needed to replace generation from coal-fired plants that are scheduled to retire and power purchase agreements that are expiring, according to paperwork filed with the Public Service Commission of Wisconsin on May 31.
Under the terms of the deals, Wisconsin Public Service Corp. and Madison Gas and Electric will buy a combined 50% stake in Invenergy’s 300 MW Badger Hollow project in Iowa County and 100% of NextEra’s 150 MW Two Creeks facility in Manitowoc and Kewaunee counties.
WPS is buying larger stakes in the two projects than MGE. WPS will own 100 MW of each of Badger Hollow and Two Creeks, while MGE will own 50 MW of each project.
The proposed purchase price for the entire 300 MW is $389.7 million, or roughly $1.30/W. Consulting firm DNV-GL provided independent analysis on the deal value.
“The economic analysis assumes the locational marginal prices will escalate 2-4% annually from a starting point of $32.94/MWh in 2017,” reads the filing. The utilities have requested PUC approval by Nov. 1.
Construction on the projects, both of which will be fitted with single-axis trackers to yield a capacity factor of approximately 24%, is set to begin in 2019. The projects are due to be online by late 2020, with Invenergy and NextEra staying on to operate them.
“As the result of planned retirement of aging and relatively inefficient coal-fired generating units (Pulliam 7 and 8 and WPS's share of Edgewater 4), WPS will need 150 MW of capacity beginning in 2020,” reads the regulatory filing. “Likewise, MGE will need over 80 MW of new capacity by 2022 due to previously announced retirements of legacy assets and expiration of PPAs.”
WPS is retiring 270 MW at the Pulliam and Edgewater 4 units, and MGE is retiring approximately 75 MW at combustion turbine sites located throughout the utility’s service territory.