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In what could turn out to be a temporary win for energy customers in Michigan's Upper Peninsula, federal regulators have postponed a price increase that would have taken effect Monday.

The Federal Energy Regulatory Commission asked the operator of the Midwest power grid for more information regarding its plan to place most of the costs to run a Marquette, Mich., power plant on customers in the Upper Peninsula.

The delay means that for now, customers in Wisconsin will continue to be billed for a majority of the costs to run the Presque Isle plant, owned by We Energies.

The request for more information will keep price increases in the U.P. — amounting to several hundred dollars a year for homeowners and more for businesses — from taking effect for at least a few months, according to Cloverland Electric Cooperative.

Cloverland has been vocal in protesting the pricing plan that boosted its share of costs to run the power plant to $22 million a year.

"We made our case to FERC that the costs to Cloverland do not match the benefits from the Presque Isle Power Plant. This is good news for our members but we are not out of the woods yet," Dan Dasho, president and chief executive of Cloverland, said in a news release Monday.

The federal agency sent a letter on Friday asking the Midcontinent Independent System Operator to provide more information within 30 days. A ruling by the federal agency that could change how the costs are allocated would then be considered.

If FERC ends up agreeing that Cloverland, in the eastern part of the U.P., shouldn't pay as much, that ruling could end up shifting costs for the power plant to other customers, such as those in the western part of the U.P. or in Wisconsin.

Wisconsin customers and the Wisconsin Public Service Commission had argued this year that they were paying too much of the bill for the power plant.

Mine left utility

Who pays for operating a power plant is usually a straightforward proposition. But there's nothing straightforward about the Presque Isle plant, a coal-fired power plant owned and operated by We Energies but that the Milwaukee utility no longer needs after it lost its largest customer last year.

Taking advantage of a change in Michigan's utility deregulation laws, Cliffs Natural Resources last year opted to leave We Energies and choose a different power company.

The departure by Cliffs, the operator of two iron-ore mines and the original owner of the plant in Marquette, left We Energies without 80% of its electricity demand in the U.P.

As a result, We Energies sought to shut down the plant, only to be rejected because Presque Isle is needed to keep the lights on in the U.P. We Energies is now being paid $97 million a year to run the plant by the Midwest grid operator.

Exactly who pays how much will be proposed by the Midwest grid operator in a filing that's expected by the end of the year.

The split over who pays comes as negotiations continue over a long-term solution that would enable the We Energies coal plant to shut down.

Cliffs has proposed to build a natural gas-fired power plant along with Chicago-based Invenergy to serve the mines.

Cliffs left We Energies last year because it was being billed for projects in Wisconsin that didn't help the U.P., said Lourenco Goncalves, Cliffs' president and chief executive in a letter posted on Cliffs' website.

"Our mines cannot bear constant rate increases to fund developments that do not advance a cost-effective energy future for Michigan," he wrote.

At the same time, he said, "Cliffs is moving forward to secure an affordable and reliable energy solution to meet our current and future business needs."

The best solution for the U.P., said an energy efficiency advocate, is not to put all of the region's energy eggs in one basket.

"It seems like we've gotten into this problem because we decided to put all our eggs in one giant coal basket, and the proposals now are that we're going to put all our eggs in one giant natural gas basket," said Abhilash Kantamneni of Houghton, who supports expanded use of distributed energy resources such as solar, wind and bioenergy.

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