We Energies Readies New Steam HQ At Valley Power Plant

District Energy Headquarters and the Valley Power Plant. Photo by Jeramey Jannene.

We Energies is nearing completion on a new $5.5 million home for its steam infrastructure team.

Known as the District Energy Headquarters, the 15,000-square-foot building is rising just west of the Valley Power Plant (VAPP), 1019 W. Canal St. The new structure includes a 4,700-square-foot office and 10,300-square-foot garage.

The employees that will work in the facility maintain a steam distribution system with 3.5 miles of tunnels, 40 miles of steam lines and approximately 480 customers.

Customers, primarily in office buildings and downtown apartments, use the system to heat their buildings as well as to create hot water and other practical uses (at least one downtown athletic club used it to heat a sauna until recently). Steam runs through the walkable tunnels in high-pressure pipes. The steam originally came from waste heat from the coal-powered VAPP, but the plant was converted to burning natural gas in 2015.

The steam team will be making the move to the Menomonee Valley from two buildings near N. 35th St. and W. Wisconsin Ave. The company leases a one-story warehouse at 613 N. 35th St. for 18,000 square feet of garage and office space and an additional 2,600 square feet of office space in an adjacent shopping center at 3501-3535 W. Wisconsin Ave. Both have been owned for decades by Megal Development Corporation.

“The new building will improve overall work flow and efficiency by consolidating the [district energy] work group in a central location. Its close proximity to VAPP enables sharing administrative resources as well as the facilities at VAPP. DE plans to share VAPP’s storeroom, machine shop, fabrication shop, and locker rooms. These synergies with VAPP’s existing facilities help keep the new building footprint to a minimum. Operation and maintenance cost savings are achieved through staffing efficiencies, sharing facilities with VAPP, and eliminating lease payments. Lastly, one of the Company’s top priorities is the safety of its employees. At the locations currently being leased, there are on-going safety and security concerns,” said the utility in a February 2021 filing with the Public Service Commission (PSC).

The PSC approved the project in June 2021 and construction began in March 2022. The building is expected to go into service on May 31.

The new building is being constructed on a 7.61-acre property, 1135 W. Canal St. The rear of the site is a storage yard. The power plant sits on a separate parcel to the east.

The facility is being designed and constructed by Anderson Ashton.

We Energies originally designed and created a cost estimate for the project before the COVID-19 pandemic. But inflation, since the pandemic took hold, has been a major driving force behind the project’s cost growing by nearly $1.2 million.

The project also has run into some legacy items from the Menomonee Valley’s industrial past. “Additionally, during construction abandoned foundations and an underground storage tank were discovered during foundation excavation, which required unexpected removal, remediation, and associated costs that were not included in the initial project estimate,” says a Jan. 31 letter to the PSC explaining the cost increases.

A 1975 aerial image of the site, taken less than a decade after the plant opened, shows several smaller buildings in the area where the new structure is going up. Prior to the power plant’s construction, a series of large shipping slips were located on the site.

The building’s structure was switched from engineered metal to precast concrete in an attempt to contain cost escalation.

The district, in its filing with the PSC, reports considering two other options for the development. It estimated a stand-alone facility away from the power plant would have cost $5 million, a $700,000 premium on the current project’s original cost. It also proposed building an additional floor of office space on the three-story, power-plant service building and a new garage, but labeled the option as “high risk” given the uncertainty if the office building could support an additional floor. The additional floor proposal also was estimated to cost an additional $200,000 compared to the stand-alone facility.

District energy workers have been busy in recent years. The system flooded in 2020 and 2021.

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