We Energies' plan for $2 billion natural gas plant faces criticism at public hearing
OAK CREEK, Wis. (CBS 58) -- People opposed to a proposed natural gas plant project packed two public hearings on Tuesday.
The hearings are standard procedure for Wisconsin's Public Service Commission (PSC), which oversees the state's utilities.
We Energies is pursuing a $2 billion project that would include construction of a new natural gas plant on the site of its current coal plants in Oak Creek, as well as a new pipeline and storage facility.
The company says a new natural gas plant would allow it to fully retire the original coal plant on the property as it converts the second coal facility to a gas operation.
At a protest event ahead of the hearings and during the testimony, most speakers rejected the project because of environmental concerns.
"This community will not benefit as much from the current proposal as an alternative that makes our energy system more robust, healthy and sustainable," Joelle Rapp, a Racine resident, said.
We Energies spokesperson Brendan Conway said the company is on track to put $9 billion toward wind, solar and battery storage projects across the state by 2029.
He said even once those projects are all online, the natural gas plant will be needed to supply power in situations where the renewable sources are unavailable or when extreme weather causes prolonged periods of surge-level demand. Conway estimated the natural gas plant would operate at 10 to 20% capacity most of the time.
"For those times when renewable energy can't meet the need or when the need is too great - really hot days, really cold days, the power plants that we're proposing to build, these natural gas plants, they'd turn on to fill that need," Conway said. "And they'd turn off again."
Critics question capacity need, customers served
Tom Content, director of the Citizens Utility Board, said he doubted future energy demand is high enough to justify a new plant at the scale We Energies is proposing. He said the state's current utility governance structure incentivizes utility companies to undertake large infrastructure projects.
Beyond that, Content said the timing isn't right. The PSC has approved rate increases for We Energies for both 2025 and 2026, and it also approved rate hikes for 2023 and 2024.
"We already have an affordability concern," Content said. "So, it's really incumbent on the state regulators to really look at what's the most cost-effective choice for customers."
Conway said construction costs would eventually be reflected on customers' bills, but he said 2027 is the soonest that would happen and added those costs would amount to less than what customers would pay to keep one of the coal plants in operation.
"There's some costs on the front end," he said. "But over the longer end, that is going to save customers money, as opposed to just continuing to do things the way they would have done."
Content and other opponents also questioned how much of the forecasted increase in demand was due to Microsoft's plans to open a data center in Mount Pleasant. That project has once again paused while the company announced in January it is buying 240 acres in Kenosha County along I-94 for another data center project.
Content said he worries We Energies is building up infrastructure to supply enough power for data centers that may not fully materialize.
"There's a fever pitch where there's going to be a lot more data center announcements than there are actually gonna be data centers built," he said. "So, we're concerned about where does rhetoric meet reality?"
Conway acknowledged the Mount Pleasant data center is a factor in the utility's demand forecasts, but he said the gas plant will also be needed to power other businesses and homes eventually built along the I-94 corridor in Racine and Kenosha counties.
"We're expecting to see an increase of energy significant in the next five years or so, and part of it is the data center project in Mount Pleasant, but also, there's a lot more manufacturing happening in Wisconsin," Conway said. "This is not just for Microsoft, to be very clear. That said, for anything we do build for Microsoft, and we've said this and Microsoft has said this, they will pay for it."
The details of We Energies' agreement with Microsoft will be a separate case that goes before the PSC. That case will outline the rate Microsoft pays for its electricity and who will cover the costs of electric infrastructure built for the data center campus.
Tuesday's evening on the natural gas plant was cut short at 8 p.m. because that's when the Oak Creek Community Center closes. People still waiting to testify were upset, and the PSC responded by extending the deadline for comments on both the proposed gas plant and liquified natural gas storage facility to April 7.