Dynegy coal plant

The power plant outside of the southern Illinois town of Newton is one of three coal-fired plants Dynegy Inc. is planning to close in the next year. 

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A survey of Midwest utilities shows electricity supplies for the region are adequate for 2017 but some areas could run short of power reserves starting in 2018 because of plans to close several coal-fired and nuclear power plants.

Wisconsin is not expected to face a power shortage, but by 2021, the amount of extra power generated within the state will shrink substantially, according to the annual report by MISO, the Midcontinent Independent System Operator, and the Organization of MISO States.

The analysis shows MISO’s Midwest region should be able to meet peak electric demand in 2017 with a surplus of 2.7 gigawatts of power generated in 2017. But the surplus could drop by two-thirds, to 900 megawatts, if potential power plant shutdowns are put into effect.

“Retirements in excess of new generation are driving supply to tighten in the region,” said John Bear, MISO’s CEO, in a written statement.

MISO, based in Carmel, Indiana, is in charge of the flow of electricity over high-voltage transmission lines in all or parts of 15 states, extending down the nation’s midsection, from Montana to Louisiana, as well as the Canadian province of Manitoba.

MISO’s report is based on information from utilities within the territory. “It helps show what’s going on across the region,” MISO spokesman Andy Schonert said. “It helps people make decisions about either keeping plants online or building new generation.”

Just in the past two months, Dynegy Inc. said it plans to close three coal-fired generators in southern Illinois during the next year, switching off 1,835 megawatts of electricity. Earlier this year, Dynegy announced plans to shutter a 465-megawatt power plant in the southern part of the state by this month.

Dynegy said it is losing money on the power plants’ operations because of MISO’s market design.

Exelon said it will close two nuclear power plants in Illinois, at Clinton and Cordova, over the next two years because of a lack of progress on energy legislation in that state.

Exelon said the reactors “have lost a combined $800 million in the past seven years, despite being two of Exelon’s best-performing plants.” Their total capacity is 2,940 megawatts.

DTE Energy said between 2020 and 2023, it will retire eight coal-fired power plants at three Michigan sites that represented one-fourth of its total generation in 2015, enough to power 900,000 homes.

The MISO report said in 2017, parts of Michigan and Missouri will fall short of the 15.2 percent reserve capacity that the organization considers adequate. By 2021, Illinois, Iowa, Indiana and Kentucky will be added to that list, based on the current closing announcements and expected growth in peak power needs.

After 2017, “additional action will be needed to ensure sufficient resources are available going forward,” the report said. It does not account for the potential effect of federal environmental legislation, currently tied up in court.

Leaders of two Wisconsin nonprofits were not concerned about demands on the state’s power supply that could result from tighter supplies elsewhere.

The report “should create opportunity throughout the Midwest to bring even more renewable energy online,” said Tyler Huebner, executive director of RENEW Wisconsin, a renewable energy advocacy group in Madison.

James Woywod, staff attorney for the Citizens Utility Board of Wisconsin, said Wisconsin has more generation capacity than required right now and so does the region.

“MISO as a whole still has, at least in the short term, surplus capacity. I don’t think this particular report is cause for concern for us,” Woywod said.

MISO’s report said areas falling below the reserve margin should be able to import power from other parts of the U.S. in 2017. But it suggested steps such as adding power sources and beefing up the network of transmission lines that will likely be needed to make sure enough electricity is available in the region beyond that time.

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Judy Newman is a business reporter for the Wisconsin State Journal.