Avoiding the Stranded Asset Mistakes of the Past: A Case Study in Wisconsin

The document analyzes the financial burden on Wisconsin Electric Power Company (WEPCO) ratepayers resulting from the early retirement of the coal-fired Oak Creek Power Plant and warns against repeating these mistakes by investing in new natural gas plants. It argues that clean energy alternatives and better regulatory scrutiny of load forecasts can prevent future stranded assets.

• The early retirement of the 640 MW coal-fired Oak Creek Power Plant at the end of 2025 creates a stranded asset with $645 million remaining on the books. This results in WEPCO residential customers paying an average of $2.40 per month, or roughly $28.81 per year, for the next 17 years for a plant that provides no electricity.
• WEPCO's proposal to replace coal with gas-fired power could cost residential customers an average of $6.52 per month, totaling $903 in net present value (NPV) over a 30-year lifespan. However, risks such as volatile natural gas prices, supply chain bottlenecks for turbines, and US federal policy increasing LNG terminals could raise these costs to a total of $1,591 (NPV) per household.
• There is a significant risk that new gas plants will become stranded assets due to the availability of cheaper clean energy. Clean energy portfolios are already less expensive than 72% of new gas plants without subsidies, and less than 99% when utilizing Inflation Reduction Act tax credits.
• If a proposed gas plant were to be stranded 17 years early, the combined cost of the stranded coal and gas assets could reach $371 (NPV) for each WEPCO residential customer.
• The document suggests that the burden of the Oak Creek coal plant could have been reduced by $117.5 million for ratepayers if WEPCO had used securitization for the debt, which would have lowered the monthly burden by 20%.

APA

RMI (2025). Avoiding the Stranded Asset Mistakes of the Past: A Case Study in Wisconsin. https://rmi.org/resources/avoiding-the-stranded-asset-mistakes-of-the-past-a-case-study-in-wisconsin/

Chicago

RMI. Avoiding the Stranded Asset Mistakes of the Past: A Case Study in Wisconsin. 2025. https://rmi.org/resources/avoiding-the-stranded-asset-mistakes-of-the-past-a-case-study-in-wisconsin/.

Wikipedia

{{cite report |author=RMI |title=Avoiding the Stranded Asset Mistakes of the Past: A Case Study in Wisconsin |date=13 March 2025 |url=https://rmi.org/resources/avoiding-the-stranded-asset-mistakes-of-the-past-a-case-study-in-wisconsin/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025avoiding, author = {{RMI}}, title = {{Avoiding the Stranded Asset Mistakes of the Past: A Case Study in Wisconsin}}, institution = {RMI}, year = {2025}, month = mar, url = {https://rmi.org/resources/avoiding-the-stranded-asset-mistakes-of-the-past-a-case-study-in-wisconsin/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }