June 21, 2007 

Ms. Sandra J. Paske 

Secretary to the Commission 

Public Service Commission of Wisconsin 

Post Office Box 7854 

Madison, WI 53707-7854 

Dear Ms. Paske: 

Oak Creek Power Plant Units 5, 6, 7, and 8 – Installation of Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment for Control of Sulfur Dioxide and Nitrogen Oxide Emissions 

PSCW File No. 6630-CE-299 

Pursuant to §196.49, Wis. Stats., and PSC 112, Wis. Adm. Code, Wisconsin Electric 

Power Company (“Wisconsin Electric” or “the Company”) is submitting the attached 

application for a Certificate of Authority for authorization to install sulfur dioxide and 

nitrogen oxide control technology on units 5, 6, 7, and 8 at the Oak Creek Power Plant. 

These controls are a significant part of Wisconsin Electric’s commitment to meet new 

environmental emission requirements to improve air quality in Southeast Wisconsin. 

Wisconsin Electric has determined that this project is integral to its compliance strategy

for meetings its obligations under the Clean Air Interstate Rule (“CAIR”) and the Federal 

8 Hour Ozone requirements, as well as with the U.S. Environmental Protection Agency in 

accordance with a Consent Decree presently lodged in federal court. In addition, this 

project is a part of the Company’s Power the Future strategy announced in 2000, which 

includes investing in new generation facilities, improving the environmental performance 

of our existing facilities, and upgrading our existing distribution system. 

If the equipment is not installed, the only option available to Wisconsin Electric under the 

Consent Decree is to prematurely shut down Oak Creek units 5-8 on December 31, 2012. 

The shutdown option would require construction of over 1,000 megawatts of baseload 

generation by December 31, 2012 in order to meet the projected energy requirements of 

Wisconsin Electric’s customers. Although 2012 is several years off, new baseload 

generation can take up to10 years to permit and construct. Oak Creek units 5-8 have been 

in operation since 1959, and they have a useful life of another 20 to 25 years. The results 

of the Company’s generation expansion model, EGEAS, show that upgrading the emission 

control systems at the Oak Creek units is the best answer for our customers, saving them 

over $600 million. 
Ms. Sandra J. Paske 

June 21, 2007 

Page 2 

Wisconsin Electric is implementing a three-part strategy to reduce emissions. 

• Environmental controls and retirements: Through December 31, 2006, the 

Company has spent approximately $355.0 million for emission controls, and it is 

estimated that we will have spent in excess of $1 billion in capital by the end of 

2013. The Port Washington coal fired units were recently retired and replaced with 

combined cycle natural gas units. 

• Renewable energy: We have significantly increased the number of customers 

buying renewable energy, have added renewable energy to our generation 

portfolio, and have worked to increase the visibility and understanding of 

renewable energy among our customers and the general public. 

• Efficiency: We have an active energy efficiency initiative that is also an 

outgrowth of the Company’s Power the Future plan. This effort is on schedule and 

the Company is investigating other similar initiatives. 

Significant actions taken or planned to implement this strategy include the following: 

• Installing the Pleasant Prairie Power Plant air quality control equipment; 

• Retiring 500 MW of older coal generation; 

• Constructing 145 MW of wind generation; 

• Investing in 55 MW of energy efficiency, as well as investigating continuation of 

such efforts. The Company’s pending rate filing addresses future efforts. 

• The Company is currently considering an RFP for non-wind renewables in order 

to evaluate the current availability and price of non-wind options. 

From an even broader perspective, the Company has taken early steps to address 

greenhouse gas emissions by: 

• Renewing the Point Beach Operating License; 

• Hosting an innovative project at Pleasant Prairie Power Plant to demonstrate a 

new technology to capture carbon dioxide (CO2) emissions from a coal-fired 

power plant;

• Creating one of the first successful green pricing renewable energy programs in 

the country; 

• Taking a proactive approach to working with governmental agencies and other 

groups to address greenhouse gas emission; and 

• Participating in numerous initiatives to address climate change issues, including 

the Belize forest preservation. 
Ms. Sandra J. Paske 

June 21, 2007 

Page 3 

The Company respectfully requests that a hearing be held for this project. Although a 

hearing is not required for projects authorized under Wisconsin Statutes §196.49, the 

Commission has discretionary authority to order one (See Wis. Admin. Code PSC 112.07). 

In a similar project, the application by Wisconsin Public Service Corporation (WPSC) to 

install pollution control equipment on Weston 3 (which WPSC has since withdrawn), a 

petitioner had requested a contested case hearing on WPS’s fleet-wide plan for air 

emission reductions. The Commission denied the petitioner’s request but, on its own 

motion, ordered a hearing be held so that the public could better understand issues related 

to the project. The Commission ordered the scope of the hearing be narrowed to focus on 

the application and its merit—the proposed technology and cost effectiveness rather than a 

system wide look at WPS’s fleet (See Order dated March 22, 2007 in Docket No. 6690-

CE-197). Consistent with the Commission’s order in that proceeding, we respectfully 

request that a hearing with the same narrow scope be held for this project. The Company 

requests the Commission to hold a prehearing conference on the project by the end of July 

to facilitate the schedule for review as described in the attached application. 

Please contact Mr. Paul Farron at 414-221-3958 for information or if you have any further 

questions. 

Sincerely, 

Roman A. Draba 

Vice President 

Regulatory Affairs and Policy 

cc: Mr. Scot Cullen – PSCW

 Mr. Jim Lepinski - PSCW

 Mr. Robert Norcross - PSCW

 Mr. Dan Sage – PSCW 

 Mr. David Siebert - WDNR 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

Pursuant to §196.49, Wis. Stats. and PSC 112, Wis. Adm. Code, Wisconsin Electric Power 

Company (“Wisconsin Electric” or “the Company”), requests authorization to install limestone 

based, forced oxidation, wet flue gas desulfurization ("WFGD") sulfur dioxide (“SO2”) control 

technology and selective catalytic reduction (“SCR”) nitrogen oxide (“NOx”) control technology 

on units 5, 6, 7, and 8 at Oak Creek Power Plant (the “Project”). The Project will also include the 

installation of a new common chimney for the existing units, limestone and gypsum handling 

equipment to support the new WFGD, and a new auxiliary electrical system to supply the loads 

being installed. The total estimated cost of the Project is $820 million, including AFUDC. 

Oak Creek Power Plant (“OCPP”) is located in both the City of Oak Creek, Milwaukee County, 

and the Village of Caledonia, Racine County, Wisconsin. OCPP currently consists of four fossilfueled generating units, each with a pulverized-coal-fired boiler and steam turbine generator. Unit 

5 was placed in service in 1959, with a net summer rating of 261 MW. Unit 6 was placed in 

service in 1961, with a net summer rating of 264 MW. Unit 7 was placed in service in 1965, with 

a net summer rating of 298 MW. Unit 8 was placed in service in 1967, with a net summer rating 

of 312 MW. Two additional units are currently being constructed on the site. 

The Company also submits this application to the Commission pursuant to the provisions of § 

30.025, Wis. Stats., as revised by 2003 Wisconsin Act 89, and has complied with the applicable 

pre-application requirements. This application is also being submitted to the Wisconsin 

Department of Natural Resources (“WDNR”) and includes the materials necessary for joint 

application to WDNR and the Army Corps of Engineers for required waterway permits. This will 

enable WDNR to issue the Chapter 30 permit for the Project within 30 days of an affirmative 

decision in this docket. 

Reason for the Project 

Wisconsin Electric proposes to install these control technologies at OCPP as part of its 

commitment to meet environmental requirements related to power plant emissions at a reasonable 

cost. Wisconsin Electric has determined that this project is integral to its compliance strategy for 

meeting its obligations under the Clean Air Interstate Rule (“CAIR”) and the Federal 8 Hour 

Ozone requirements, as well as with the U.S. Environmental Protection Agency (“EPA”) in 

accordance with a Consent Decree presently lodged in federal court. 

The Federal CAIR establishes state and federal emission caps for NOx and SO2, with initial 

reductions required by January 1, 2009 for NOx and January 1, 2010 for SO2. Additional 

reductions for NOx and SO2 are required by January 1, 2015. The WDNR has proposed rules to 

implement CAIR in Wisconsin. These rules are currently in the final approval process. 

Under the Federal 8 Hour Ozone Rule Milwaukee and Racine Counties, where the Oak Creek 

Power Plant is located, are designated as moderate non-attainment for ozone. The WDNR has 

proposed Reasonably Achievable Control Technology (“RACT”) rules for NOx emissions for the 

moderate non-attainment counties. Phase II of the RACT rules will require additional NOx

reductions by May 1, 2013, beyond the CAIR requirements, from electric generating units located 

in the non-attainment counties. The RACT rules are also in the final approval process. The 

WDNR has recently submitted a request to EPA to redesignate counties in southeast Wisconsin as 

Wisconsin Electric Power Company Page 1 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

attainment for ozone. The RACT rules are part of the redesignation request and will continue to 

apply even if EPA approves DNR’s redesignation request. 

The terms of the proposed Consent Decree require the Company to install SCR and FGD 

technology, as well as meet a 30-day rolling average emission rate of 0.10 pounds per million Btu 

for both NOx and SO2, on Oak Creek units 5 through 8 (“OC 5-8”). In order to comply with the 

schedule proposed in the Consent Decree, the SCR and WFGD systems for OC 5-8 must be in 

service by December 31, 2012. 

With the completion of the installation of SCR and WFGD technologies at the Pleasant Prairie 

Power Plant in the spring of 2007, OC 5-8 are the largest remaining sources of NOx and SO2

emissions in the Wisconsin Electric system. Installation of SCR and WFGD technologies at 

OCPP will reduce SO2 emissions by 80-90% and NOx emissions by 60-70%, consistent with the 

requirements of the CAIR and RACT rules and the Consent Decree. The Project, as proposed, 

provides a $614 million savings over the alternatives considered and presented in this application. 

If the equipment is not installed, the only option available to Wisconsin Electric under the Consent 

Decree, is to prematurely shut down Oak Creek units 5-8 on December 31, 2012. The shutdown 

option would require construction of over 1,000 megawatts of baseload coal generation by 

December 31, 2012 in order to meet the projected energy requirements of Wisconsin Electric’s 

customers. Although 2012 is several years off, new baseload generation can take up to 10 years to 

permit and construct. Because there is insufficient time to permit and construct baseload 

generation by 2012, Wisconsin Electric would need to rely on higher cost natural gas generation 

and purchased energy. Although Oak Creek units 5-8 have been in operation since 1959, they 

have a useful life of another 20 to 25 years. 

Description of the Project

Flue gas from each unit’s boiler is currently routed through an economizer, an air heater, an 

electrostatic precipitator, and induced draft fans prior to exiting through the chimney (See 

Appendix A, Exhibit A). The Company plans to combine the flue gas flows downstream of the 

existing induced draft fans for units 5 and 6 into a single WFGD absorber tower with integral heat 

exchanger, and combine the flue gas downstream of the existing induced draft fans for units 7 and 

8 into a second WFGD absorber tower and heat exchanger. The WFGD systems will include a 

common limestone reagent preparation system and a common gypsum dewatering system. Bulk 

limestone and gypsum storage and handling will utilize the facilities under construction to serve 

the expansion units. Cleaned flue gas from each absorber tower will be routed to new booster 

fans. The gas is then routed to new heat exchangers and SCR reactor modules (tail-end design), 

before being discharged to a new chimney (See Appendix A, Exhibit B). The reagent for the SCR 

modules will be supplied by a common aqueous ammonia storage and injection system. Appendix 

A, Exhibits C, D, E and F, are illustrations of the proposed SCR and WFGD installations. 

Wisconsin Electric Power Company Page 2 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

Major Permits

Air Permit

The Project will require an Air Pollution Control Construction Permit (“Air Construction 

Permit”) from WDNR prior to commencement of construction. Air modeling to support the 

permit application has not identified any issues that cannot be addressed to satisfy expected 

permit conditions. A permit application is being submitted to WDNR coincident with this 

application. 

Water Permits

Project construction and operation will require the following water-related permits: 

WDNR Chapter 30 Permit. A permit pursuant to Chapter 30, Wis. Stats., is required for three 

reasons. First, Site Grading and Stormwater Management plans are required according to the 

provisions of §30.025 Wis. Stats, and NR 216, Wis. Adm. Code. These plans will be included as 

part of the initial WDNR submittals, with additional detailed plans to be included in subsequent 

WDNR submittals. Second, because portions of the Project will be constructed on existing 

historical lakebed fill, the Project requires approval by the WDNR under §30.21, Wis. Stats. 

Finally, a temporary barge unloading facility may be required to facilitate construction and 

minimize Project cost. Although no new permanent lakebed fill will be required, and all 

temporary barge unloading facility structures will be removed and the lake bed restored when the 

Project is completed, these temporary activities require an approval by WNDR under §30.21, 

Wis. Stats. No wetlands will be disturbed in construction of the Project so no WDNR wetland 

water quality certification is required. 

The Company will apply for these required Ch. 30 authorizations in a joint application to WDNR 

and the Army Corps of Engineers, which also must approve activities affecting navigable waters, 

as described below. A copy of the joint WDNR/Army Corps permit application is provided in 

Appendix B. 

Army Corps of Engineers Permit. If needed, the temporary barge facilities will require an Army

Corps of Engineers Permit. The Company is working with the Corps to provide the necessary 

information to obtain a permit, and is submitting a joint WDNR/Army Corps permit application at 

the same time as this submission. 

Wisconsin Pollutant Discharge Elimination System (“WPDES”) Permit. The current WPDES 

permit for the Oak Creek plant, which is an operational permit that must be renewed every five 

years, expires in March, 2010. The renewal application must be submitted by September, 2009. 

The Company plans to include information about discharges from the WFGD, which would 

commence in 2012, in that permit renewal application. The Company anticipates that WDNR will 

revise and reissue the WPDES Permit to authorize these discharges, and that the permit will be 

issued approximately two years ahead of the scheduled start of WFGD discharge from OC 5-8. 

Wisconsin Electric Power Company Page 3 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

Project Scope 

The scope of the Project includes the following: 

• Installation of four SCR reactors containing NOx and, potentially, CO catalyst material 

through which flue gas will be routed. Each SCR installation will include a gas-gas heat 

exchanger, a steam heat exchanger for final temperature control, the SCR reactor 

structure, ammonia injection system, structural steel and access platforms, insulation and 

lagging, instrumentation and controls, and associated foundations. 

• Addition of four new booster fans for the combined gas paths to overcome the increased 

differential pressure resulting from installation of the SCR and WFGD systems and new 

ductwork. 

• Removal of existing ductwork and installation of new ductwork to permit installation of 

the WFGD and SCR systems in the flue gas paths. 

• Installation of auxiliary power supply equipment, electrical systems (motor control 

centers, etc.), and controls to support the new equipment. 

• Pre- and post-installation testing for evaluation of SCR system performance. 

• Pre- and post-installation testing for evaluation of WFGD system performance. 

• Installation of process lines to inject ammonia reagent upstream of all SCR reactors from a 

new ammonia reagent storage facility, sized to serve the four units. 

• Installation of process steam lines to support the SCR reheat requirements for the four 

units. 

• Installation of two WFGD systems, one for combined units 5 and 6, and one for combined 

units 7 and 8. Each WFGD absorber tower will be supplied with a heat exchanger to 

eliminate the need for special materials in the construction of the ductwork and the fans. 

The WFGD systems include a common limestone reagent preparation system, a common 

gypsum dewatering system, structural steel and access platforms, insulation and lagging, 

instrumentation and controls, and associated foundations and buildings. 

• Expansion of the station auxiliary power system to serve the additional load associated 

with the WFGD and SCR systems. New equipment includes station auxiliary 

transformers, 13.8 kV and 6.9 kV switchgear, load centers and motor control centers. 

• Installation of a common chimney that will include two individual chimney liners, one for 

each flue gas path. The new chimney will also include structural steel and access 

platforms, insulation and lagging, and associated foundations. 

• Modification or expansion of the plant’s wastewater treatment facilities, or installation of

additional facilities as necessary to process the effluent of the new WFGD equipment. 

Wisconsin Electric Power Company Page 4 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

• Demolition of the existing chimneys and associated equipment after the final unit is tied 

into the new gas cleaning system and returned to commercial operation. 

• Installation of new Continuous Emissions Monitoring Systems (“CEMS”) for the new gas 

cleaning paths, and a common Data Acquisition and Handling System (“DAHS”) to 

provide monitoring, recording, and report generation of emissions in accordance with air 

permit requirements. 

• Existing systems and components requiring modification include: compressed air, 

circulating water, service water, fire protection, auxiliary steam, electrical distribution, 

instrumentation and controls, and plant communications. 

Coal Combustion Products 

The new WFGD and SCR systems are downstream of the fly ash collection system and, as such, 

will have no impact on existing fly ash utilization. The WFGD systems will produce commercial 

grade gypsum which can be used in the manufacture of wall board. The Company plans to market 

this gypsum. 

Scheduling and Procurement 

The Company anticipates a 55 month construction schedule and, therefore, respectfully requests 

Commission approval by January 1, 2008 in order to meet the following schedule: 

Activity Start Finish_

Design Engineering 02/01/07 10/31/08

Procurement and Fabrication (released for Engineering-only prior to Commission approval)

WFGD Systems 04/18/07 10/15/09 

SCR Systems 03/21/07 08/15/09 

Limestone Handling Systems 09/15/08 12/15/10 

Gypsum Handling Systems 09/15/08

 12/15/10 

Chimney 08/30/07 01/15/09 

Wastewater System 10/15/07

 12/15/10 

Wisconsin Electric Power Company Page 5 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

Construction 

Mobilize 01/15/08 05/01/08 

Unit 5 and 6 Start of Work 05/01/08 

Unit 5and 6 In Service 12/01/12 

Unit 7and 8 Start of Work 05/01/08 

Unit 7 and 8 In Service 03/01/12 

Demolition of Existing Chimneys 03/01/13 08/31/13 

Commission approval by January 1, 2008 is essential to facilitate an orderly design, procurement, 

manufacturing and construction schedule. The OCPP site is extremely congested, necessitating 

careful construction planning and sequencing in order to avoid impacts to existing plant 

operations and the construction and start up of the two expansion units. 

Timely approval of the Project will also help the Company manage increased costs arising from

current equipment and materials shortages that are the result of the numerous emission reduction 

and new coal plant construction projects proposed and under construction. It will also allow the 

Company to better manage risks associated with competing for a limited supply of skilled labor 

(design engineers, craft labor, etc.) for these same projects. 

Project Cost and Financing 

Wisconsin Electric estimates the cost to install the WFGD system, SCR system and related 

equipment to be $820,000,000, detailed as follows: 

Capital Cost ($1,000) Unit 5&6 Unit 7&8 Common

WFGD System $57,978 $57,978 $8,865 

SCR System $126,357 $126,357 $7,137 

Site and Balance of Plant $112,275 51,720 $67,907 

Removal Cost ($1,000)

Site Preparation and Demolition $3,768 $1,644 $11,883 

Total Cost by Facility ($1,000) $333,426 $270,746 $145,828

Total Project Cost ($1,000) $750,000

AFUDC (Based on 50% of CWIP) ($1,000) $70,000

Gross Project Cost ($1,000) $820,000

Wisconsin Electric Power Company Page 6 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

The final capital versus expense cost split may change after detailed design is completed. The 

cost of the Project will be met from internal sources and/or from the issuance and sale of

securities. 

Description and Cost of Property Being Retired 

The facilities to be retired consist of the existing chimneys, the attached flue gas ducts and Oak 

Creek Unit 9. The gross book cost of equipment to be retired is as follows: 

Plant Account Description Gross Book Cost

311 Structure and Improvements $ 2,334,132 

312 Boiler Plant Equipment $ 6,228,809 

 341-346 Combustion Turbine $ 2,225,265

 TOTAL $10,788,206

There is no salvage value associated with the equipment to be retired. 

Effect of the Project on Cost of Operation and Reliability of Service 

Wisconsin Electric believes that the proposed Project is the most advantageous means of 

discharging its obligation as a public utility. Installation of wet flue gas desulfurization systems 

and selective catalytic reduction systems on Oak Creek units 5 through 8 will maintain the 

reliability of the Company’s service while significantly reducing sulfur dioxide and nitrogen 

oxides emitted from the plant. In addition, the Project will comply with § 196.49 Wis. Stats. 

Section 196.49(3) (b), Wis. Stat., provides that no project may proceed until the Commission has 

certified that public convenience and necessity require the project. The Commission may refuse 

to certify a project if it appears that the completion of the project will do any of the following: 

1. Substantially impair the efficiency of the service of the public utility. 

2. Provide facilities unreasonably in excess of the probable future requirements. 

3. When placed in operation, add to the cost of service without proportionately 

increasing the value or available quantity of service unless the public utility waives 

consideration by the Commission, in the fixation of rates, of such consequent 

increase of cost of service. 

Alternatives 

The Company retained the services of Washington Group International to perform a detailed 

technology assessment to determine the most cost-effective means of meeting the Company’s 

emission reduction goals. A copy of this study, “Oak Creek Units 5, 6, 7 and 8, NOx/SO2

Emissions Reduction Study”, is included as Appendix C. The study reviewed in-furnace NOx

reduction and SCR for NOx control, and wet forced oxidation flue gas desulfurization, spray dryer 

absorbers, and circulating fluid bed absorbers for SO2 control. The study also evaluated two 

emerging multi-pollutant reduction systems: Powerspan ECO and J Power ReACT. The study 

concluded that the most cost-effective technologies that meet the target emission rates were SCR 

Wisconsin Electric Power Company Page 7 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

and WFGD. These combined technologies provide the lowest evaluated cost, the highest removal 

efficiencies, and have the most commercial experience and industry acceptance. The Company 

did not consider the purchase of SO2 and NOx allowances as a viable alternative because the 

Consent Decree does not permit use of such allowances in complying with its requirements. 

Once it was determined that SCR and FGD were the most cost-effective technologies, the study 

evaluated alternate arrangements of the technology. The technology assessment concluded that 

installation of SCRs on units 5 and 6 in the traditional “hot side” arrangement, between the 

economizer outlet and the air heater inlet, was not physically possible short of demolition and 

reconstruction of the existing electrostatic precipitators (“ESP”) and other major interferences. 

This would increase construction costs dramatically and result in increased replacement power 

costs for the estimated 18-24 month outage required for demolition and reconstruction. The 

arrangement of the Unit 7 ESP directly behind the Unit 8 economizer and air heater created 

significant construction and outage penalties as well for a Unit 8 “hot side” SCR. As a result of

these constraints, the proposed arrangement of WFGD followed by “tail end” SCR was selected 

as the lowest total evaluated cost solution. “Tail end” SCR has been successfully demonstrated at 

many power plants in Germany, where they were installed in retrofit situations similar to those 

found at OCPP (See Appendix A, Exhibit G). This arrangement requires energy, in the form of 

steam or natural gas, to reheat the flue gas to the temperature required for the NOx catalytic 

reaction. The costs associated with the use of this energy have been included in the overall 

Project cost evaluation. 

The final alternative studied was the early retirement of the four existing Oak Creek units on 

December 31, 2012, with replacement of the Oak Creek 5-8 energy and capacity from new 

facilities and purchases. This alternative was analyzed using EGEAS to model the Wisconsin 

Electric system. It resulted in system costs (Discounted Revenue Requirements, “DRR”) that 

were over $600 million higher than the alternative proposed in this filing. Sensitivity analyses 

were performed, including fuel cost variations and climate change scenarios. Installing 

environmental controls on Oak Creek units 5 through 8 was the low cost alternative in every 

analysis. 

In addition, EGEAS was used to model the cost impacts of installing controls on Oak Creek units 

7 and 8 and prematurely retiring Oak Creek units 5 and 6. This evaluation showed the savings 

decreased by over 50% as compared to the savings associated with controlling Oak Creek units 5-

8. This demonstrates that Oak Creek units 5 and 6 continue to be valuable assets in the 

Company’s generating fleet. 

This economic analysis included estimated capital and O&M requirements necessary to maintain 

reliable operation of the Oak Creek units to normal end of life. The complete analysis is included 

as Appendix D. 

Wisconsin Electric Power Company Page 8 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

Project Risk Factors

The following risks are inherent in this Project and may impact its cost and schedule: 

• Market conditions for craft labor can affect project cost. Competition for labor resources 

can tighten the market and shortages of skilled labor in the area, due to other projects 

utilizing the same crafts, may extend the construction schedule and increase installation 

costs. 

• Market conditions for air quality systems have increased costs substantially over the past 

three years. Variability in future escalation rates is a significant project risk. 

• The construction of the WFGD and the SCR systems must take place in an area directly 

south, west and east of the operating units. The construction site is extremely congested, 

resulting in an increased potential for schedule delays and commensurately higher costs. 

• Production interruptions of the existing units and longer-than-planned tie-in outages 

present a risk to project cost and schedule. In addition, the Project will require 

modifications to existing plant systems, such as the control and electrical systems, which 

carry the risk of unscheduled production interruptions. 

Environmental Review Information 

Environmental Screening. Additions or replacements of plant equipment, such as described 

in this application, are normally categorized as Category III actions under § PSC 4.10(3), Wis. 

Adm. Code and do not normally require the preparation of an Environmental Assessment or an 

Environmental Impact Statement. 

Flood Hazard Exposure/Impact. The location of the proposed facilities is not within a 

floodway or the 100-year floodplain. 

Archaeological and Historic Resources. There are no known archaeological or historic 

resources in the area of the Project site. Additionally, due to prior construction activities at the 

site, it is unlikely that any previously unidentified archaeological resources will be disturbed. 

Threatened or Endangered Species. There will be no impacts to any threatened or 

endangered species as a result of this project. 

There are no federally listed species at the Project site. While the bald eagle is known to migrate 

through the area, there are no known nests on or adjacent to the Project site. Plans will be 

developed to accommodate the continued use of the existing Peregrine Falcon nest on the 

chimney during construction. A nesting box will be provided on the new chimney to allow 

relocation of the falcons prior to demolition of the existing chimneys. 

There is a state endangered herbaceous plant species located immediately south of the Project 

site. This plant will not be affected by the Project. The plant was identified during wetland 

delineations and plant surveys done in 2002 by Dr. Don Reed, Southeastern Wisconsin Regional 

Planning Commission. Specifically, this plant is located in the upland woodland adjacent to 

Wisconsin Electric Power Company Page 9 

June 15, 2007 
Wisconsin Electric Power Company’s Application to Install Wet Flue Gas 

Desulfurization and Selective Catalytic Reduction Facilities and Associated 

Equipment On Oak Creek Power Plant Units 5, 6, 7 & 8 for Control of Sulfur 

Dioxide and Nitrogen Oxide Emissions 

wetlands that are about 500 feet west of Lake Michigan and to the southwest of two existing 

wastewater treatment settling basins located south of OCPP Unit 8. 

Entities Affected by this Project 

The entities affected by the proposed Project include the EPA, WDNR, Army Corps of Engineers, 

Wisconsin Department of Commerce, Village of Caledonia, City of Oak Creek, US Fish & 

Wildlife Service, Milwaukee County, Racine County, Federal Aviation Administration, and WI

Department of Health & Family Services. A listing of permits and approvals, including affected 

entities, is provided in Appendix A, Exhibit H. Concurrently with the filing of this application, 

the Company is filing applications with WDNR for the Construction Air Permit and NR 216 

Permit, and with WDNR and the Army Corps for the Chapter 30 and Army Corps permits. The 

Company does not anticipate any difficulty obtaining the required permits and approvals. 

Wisconsin Electric Power Company Page 10 

June 15, 2007