Wisconsin Energy Elm Road coal plant back

* Unit 1 shut in September for inspection

* Elm Road units entered service in 2010 and 2011

* WEC looking at options for other coal plants

By Scott DiSavino

June 1 (Reuters) - U.S. power company Wisconsin Energy Corp said on Friday the 615-megawatt (MW) Unit 1 at the Elm Road coal-fired power plant in Wisconsin returned to service by the end of May, as expected, following a long maintenance outage.

The company shut Unit 1 in late September for an inspection near the end of its warranty period. The unit entered service in February 2010.

During the inspection, workers found deposits containing chlorides in the steam turbines.

The adjacent 615-MW Unit 2 continued to operate while Unit 1 was shut, the company said last month.

Wisconsin Energy has said it does not expect the problem with Unit 1 to affect Unit 2, which entered service in January 2011, but said it would inspect Unit 2 before its warranty ends later this year.

Bechtel, a California-based construction firm, built the new Elm Road units at Wisconsin Energy's Oak Creek power plant. The units cost Wisconsin Energy about $2 billion for its majority stake in the project.

Two other power companies own minority stakes of about 7 percent each in the Elm Road units: a unit of Wisconsin power company MGE Energy and Wisconsin Public Power Inc, a regional power company serving municipal utilities in Wisconsin, Michigan and Iowa.

Wisconsin Energy said last month that it had not estimated the cost of the Unit 1 outage.

In addition to the two new Elm Road units at Oak Creek, there are four older coal units at the site with a generating capacity of about 1,135 MW. The older units were built in the 1950s and 1960s.

Elsewhere, Wisconsin Energy is looking to convert the fuel used at the 267-MW Valley power plant in Wisconsin from coal to natural gas. The two units at Valley entered service in 1968 and 1969.

Before making decisions on Valley, Wisconsin Energy said it must get approval to run a natural gas pipeline to the plant. The company does not expect a decision on the gas line until later this year.

Separately, Wisconsin Energy and Wolverine Power Cooperative signed a letter of intent in January to evaluate a joint venture to invest in environmental improvements at Wisconsin Energy's 431-MW Presque Isle coal-fired power plant on the Upper Peninsula in Michigan.

Wisconsin Energy said proposed federal environmental regulations have created uncertainty for the Presque Isle plant, with the potential for its retirement in 2017.