- In the fall, we closed on ownership of 8.33 percent of the We Energies Elm Road supercritical coal generation project. WPPI will own approximately 50 MW each of two highly efficient, state-of-the-art, clean coal power plants on the shore of Lake Michigan. The many legal challenges to the project culminated in a Wisconsin Supreme Court victory in June, 2005, allowing construction to proceed. In November, we issued nearly $237 million of revenue bonds to fund the entire cost of WPPI's investment, including interest during construction. A favorable yield curve allowed us to finance the project with a single borrowing at a very attractive fixed-interest rate, with no negative arbitrage.
The two 615-megawatt units are currently under construction in Oak Creek, Wis. The first unit is planned for operation in 2009, with the second unit scheduled to come online in 2010. These units will help WPPI maintain a diversified portfolio of resources and fuel mix, reducing future reliance on natural gas as a fuel source.
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- WPPI secured an option to own a share of the Prairie State supercritical coal project in southern Illinois near St. Louis, being developed by Peabody Energy. This unique mine-mouth project promises to provide WPPI with a long-term fuel cost hedge while avoiding rail transportation costs; it will also further diversify our resource portfolio. The project is in the permitting stage, with an expected 2011 in-service date.
- We initiated several new projects with others to develop additional generation, including a comprehensive coal plant siting study and investigation of the feasibility of a coal-fired unit in the Upper Peninsula of Michigan.
- As a means to deepen our commitment to renewable resources, WPPI is participating in the Forward Wind Energy Project located in Brownsville, Wis., being developed by Invenergy. WPPI has a contract for 40 MW of the capacity from this large wind farm. The project is in the final permitting stage.
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