Wisconsin Electric Power Company signs 20-year power purchase agreement with NextEra for Point Beach nuclear plant

WEC Energy Group said its subsidiary Wisconsin Electric Power Company has signed a 20-year power purchase agreement with NextEra Energy Point Beach to purchase 86% of the capacity, energy, ancillary services, and environmental attributes from both units of the Point Beach Nuclear Plant in Manitowoc County, Wisconsin.

According to a filing submitted to the U.S. Securities and Exchange Commission (SEC), the new agreement remains subject to approval by the Public Service Commission of Wisconsin (PSC). If approved, the agreement would take effect upon the expiration of the existing power purchase agreement, with the Unit 1 agreement extending through 2050 and the Unit 2 agreement through 2053.

The Point Beach Nuclear Plant has been in operation for more than half a century and is currently the only operating nuclear plant in Wisconsin. Wisconsin Electric Power Company once owned the plant before selling it to a Florida-based utility in 2007. Currently, Wisconsin Electric Power Company continues to purchase the majority of the plant's output under a power purchase agreement.

The electricity pricing of the Point Beach Nuclear Plant has long drawn attention from consumer advocacy groups. Data shows that Wisconsin Electric Power Company's fuel costs are approximately twice those of its sister company, Wisconsin Public Service Company, with costs related to the Point Beach Nuclear Plant being a significant factor in the disparity. Under the existing agreement, the plant's electricity price increases by more than 7% per megawatt-hour annually.

WEC Energy Group stated that, if approved by regulators, the new agreement would result in customer savings compared to the existing power purchase arrangement. The Citizens Utility Board (CUB) of Wisconsin said it will review the new agreement, focusing on how much it can reduce costs for consumers relative to the current pricing mechanism.

Meanwhile, electricity demand in Wisconsin is rising rapidly. A draft report released by the Public Service Commission of Wisconsin in June projects that the state's peak electricity demand will grow by 40% over the next five years, driven primarily by new data centers in Port Washington, Mount Pleasant, and Beaver Dam.

WEC Energy Group is also advancing efforts to bring more nuclear resources onto the state's grid. The company and EnergySolutions, owner of the retired Kewaunee Nuclear Power Plant, are awaiting approval from the U.S. Nuclear Regulatory Commission (NRC) to support the plant's restart. The plant was shut down more than a decade ago due to increased competition from cheap natural gas supplies and heightened market pressures.