ESCANABA – We Energies will not be selling the Presque Isle Power Plant in Marquette to UPPCO as planned under an energy agreement announced in January. Instead the Wisconsin company will operate the plant until its expected closure in 2020. The deal was announced Friday by Gov. Rick Snyder.

State Sen. Tom Casperson, R-Escanaba, said talks between the Upper Peninsula Power Company and Cliffs Natural Resources broke down over future power costs once UPPCO was to buy the plant from We Energies.

“The deal with UPPCO kind of went south, I guess, at the end of the day,” Casperson said. “It wasn’t anyone’s fault. It was just a matter of how it was going to play out and how the rate was going to be set. They just couldn’t come to a final agreement.”

In the initial agreement, We Energies was to leave the Upper Peninsula in order for the state of Michigan to drop its objection to a merger between Wisconsin Energy Corporation and Integrys. UPPCO was to buy the Presque Isle Power Plant from We Energies for $1 as well as the company’s distribution system in the U.P.

But word came Friday, March 6, that talks were beginning to break down between UPPCO and Cliffs. In a surprise announcement March 13, Gov. Snyder announced the deal between We Energies and Cliffs.

“We Energies and Cliffs both had a lot at stake here. The good news is that they came together. I think in the end it is going to be good for everybody in Michigan,” said Casperson.

We Energies is also expected to play a role in the development of a natural gas generator at Cliffs that will eventually replace the Presque Isle Power Plant. Part of the deal is that We Energies operate as a Michigan-only utility. Casperson is expected to introduce legislation to make that happen.

“It’s important that we can set our course for our energy future. As much as we appreciate Wisconsin, we compete against each other for business and jobs so if we are relying on them for our power it puts us in a tough and, I think, uncompetitive role with Wisconsin. Michigan-based power puts us in a better position to compete with other states,” Casperson said.

Under the deal, Gov. Snyder reaffirmed that Michigan will not object to the $9.1 billion merger between Wisconsin Energy Corporation and Integrys.

It also resolves objections from Cloverland Electric Cooperative over the sale of We Energies’ operations to UPPCO. The co-op wanted first right of refusal of We Energies assets under the original agreement that would have had We Energies leaving the state.