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A northern Wisconsin utility's latest plan to replace coal with logging waste and dead trees as its primary fuel to generate electricity has been approved by the state Public Service Commission.

Northern States Power Company-Wisconsin, a subsidiary of Minneapolis-based Xcel Energy, said this week that installing the biomass gasification technology in its third generator at Bay Front Power Plant in Ashland will make it the largest biomass plant in the Midwest -- based on producing 60 megawatts of power from that fuel.

The utility now powers two generators with steam made from burning wood products at the plant. It said the cost of converting the third by 2012 is estimated at $58.1 million and the change will eliminate burning more than 100,000 tons of coal each year. Coal-fired power plant emissions contain carbon dioxide, the leading greenhouse gas linked to global warming.

Wood residue left in forests from logging, such as treetops, damaged trees and underutilized species -- so-called "lower quality biomass" -- will be the primary fuel to produce steam for the third generator, the company said. The wood will come from several counties in northern Wisconsin, Minnesota and Michigan.

The plant generates enough electricity to power about 55,000 homes each year, and burning all wood will not affect that capacity, said Brian Elwood, an Excel Energy spokesman in Eau Claire.

Northern States Power now burns about 200,000 tons of wood waste each year and at least another 185,000 tons will be burned with the change, Elwood said.

"There is more than ample supplies of wood residue from the wood products industry," he said. "We have a lot of relationships with the contractors and vendors up there."

The PSC said the technology approved for the plant was developed during the past half-century and is being used throughout the world, mostly in Asia and Europe, because of growing interest in clean, renewable energy.

"We are at a critical crossroads in energy policy," Commissioner Lauren Azar said. "Every decision we make today needs to be considered in the context of the fact that we will soon be engaging in a transformation of our energy infrastructure."

ASSOCIATED PRESS