WEC Energy Group (WEC Quick QuoteWEC - Free Report) announced that it has inked a 20-year power purchase agreement with Cliffs Natural Resources Inc. (CLF Quick QuoteCLF - Free Report) to supply clean and affordable power to the latter’s Tilden mine in the Upper Peninsula region of Michigan.

Details of the Project

WEC Energy will invest $255 million in the construction of two naturalgas facilities across two sites in the Upper Peninsularegion.WEC Energy will wholly own and operate the facilities with a cumulative power generating capacity of 170 megawatts.

But before starting commercial operations of these two plants, WEC Energy intends to retire the coal-fired Presque Isle power plant in Marquette, MI, as it has become difficult as well as expensive to comply with the new carbon emission control regulations.

The latest agreement will not only enable the Tilden mine to be operationally efficient but will also benefit the residents of the Upper Peninsula region by enhancing reliability and optimizing rates.

Subject to regulatory approvals, the two natural gas power plants are expected to begin operations in 2019.

WEC ENERGY GRP Price

WEC ENERGY GRP Price | WEC ENERGY GRP Quote

Second-Quarter Results

WEC Energy recently reported second-quarter 2016 adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 55 cents by 3.6%.

Thanks to long-term planning, operating efficiency and financial discipline, the company was able to deliver a better-than-expected performance in the reported quarter. (Read more: WEC Energy Beats on Q2 Earnings, Misses Revenues)

Zacks Rank and Key Picks

WEC Energy carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the utility space are Korea Electric Power Corp. (KEP Quick QuoteKEP - Free Report) and Spark Energy, Inc. , both sporting a Zacks Rank #1 (Strong Buy).

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