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Like Many in Lansing, Dillon Still Sees Coal as King

But his gubernatorial campaign claims he’s a clean-energy leader

June 28, 2010 | By Jim Dulzo
Great Lakes Bulletin News Service

9 &10 News
  Like some other lawmakers, Andy Dillon still thinks new coal plants would help Michigan’s economy. But a TV spot claims he’s a clean-energy leader.
Political sparks flew in Lansing when state regulators nixed the proposed Rogers City coal plant in May.

For the regulators, the evidence supporting their controversial decision was undeniable: There simply was no need for the plant.

But pro-coal state lawmakers from the Tip of the Mitt to the bottom of The Thumb attacked Governor Jennifer Granholm and the Michigan Department of Natural Resources and Environment for the decision. They said the administration’s regulators were killing thousands of jobs, caving in to special interest groups, and didn’t know what they were talking about.

Yet, six days later, when Consumers Energy suspended its own proposed Bay City coal plant for exactly the same reason—no need for it—there was near silence from the same folks. No protests about the company killing jobs, caving in to shareholder pressure (the company’s stock price rose 16 cents after the announcement), or second-guessing its own energy demand predictions.

This contradiction should not surprise anyone who follows Lansing lawmakers’ halting moves on clean energy legislation and policy.

Nor should it surprise them that one of the lawmakers complaining the loudest about the Rogers City plant denial, Speaker of the House Andy Dillon, now runs gubernatorial primary TV spots touting his clean energy leadership.

Hurry Up and Wait
Michigan’s clean energy advocates have long said that the state, desperate for new manufacturing jobs, should be building the new products—from high tech power savers to solar panels and wind turbines—that provide efficiency and clean electricity to the world.

But that requires strong efficiency and renewable energy mandates for the state’s utilities—the best way to attract firms that design, build, and install those new, clean, power-producing products.

Yet, the response from many lawmakers has been to hurry up and wait.

It took close to two years for the Michigan Legislature to water down the governor’s strong clean energy proposals into some of the weakest standards in the Midwest—and finally approve them. By the time Lansing finished, in October 2008, more than two dozen other states had beat us to the punch.

Four months later, in her February 2009 State of the State address, Governor Granholm invoked state and federal law to order utilities to prove they needed new coal plants before building them.

When Speaker Dillon and House Minority Leader Kevin Elsenheimer realized the governor was serious about looking critically at new coal power, they cajoled 70 other lawmakers to sign a letter protesting her order. They falsely called it a “moratorium” and demanded prompt approval of the Rogers City and Bay City coal plants.

“By delaying the permitting process for construction of new base-load power plants,” the letter said, “the state is in a sense reneging on the promise of thousands of new construction jobs for Michigan residents. While the stated motivation may be admirable, we feel that the urgent need to create jobs in Michigan trumps most all other priorities during this time of economic crisis.”

In other words, our state is so desperate for jobs that even if a coal plant is unneeded, we should build it anyway. The letter said nothing about what the new plants would do to customers’ electric rates, markets for clean energy development, or, for that matter, the environment.

So if Mr. Dillon is, as his recent TV spot claims, the man to lead Michigan toward a clean-energy manufacturing future, Michiganders should worry. A governor that’s ready to build unneeded coal plants and is slow to pass even weak efficiency and renewable energy mandates cannot be an effective competitor in the global race for clean energy manufacturing.

In fact many lawmakers, including Mr. Dillon, are still hectoring the Granholm administration about the Rogers City plant—and getting their facts wrong.

Convenient Omissions
For example, when Consumer’s halted its Bay City plant, candidate Dillon praised the company for acting smartly, since demand for its electricity had fallen 6 percent.

But Gongwer News Service reported that Mr. Dillon also complained about the Rogers City plant denial, claiming that MDNRE “doesn't have the expertise to determine if the cost of generation from the Rogers City plant would have been too high.”

Mr. Dillon’s statement was both factually wrong and disingenuous.

It was wrong because it was the Michigan Public Service Commission, the state’s expert on utility costs, rates, and electricity demand, that came up with cost and demand numbers, which were then used to guide MDNRE’s decision-making process.

Ironically, that is exactly what happened last December, too, when, based on MPSC’s numbers, MDNRE told Consumers that it did not need its proposed new Bay City plant—unless the firm turned off at least five old ones. The pro-coal crowd was too busy cheering the decision to question the expertise behind it.

The speaker’s statement was disingenuous because it implied that the Wolverine denial was based on the cost of the plant. The state’s denial letter clearly said it was based on the need for the plant. The letter did say that the plant would boost electric rates dramatically, then noted that “this is not a factor in the consideration of the permit decision, [but] it is a factor that should be considered in good public policy.”

Other lawmakers are coming up with their own Roger City whoppers, too.

State Representatives Elsenheimer and Wayne Schmidt, as well as state Senator Jason Allen—who represent northern Michigan—claim the decision killed 2,500 jobs—about 1,000 more than Wolverine Power’s rosy estimate of the number of workers it would take to build the Rogers City plant.

And, in an opinion piece in the Detroit Free Press on June 24, Representative Schmidt, like his colleagues, failed to mention that many of those jobs would go to out-of-state specialists. He also falsely described the Rogers City coal plant as “clean” and ignored MPSC’s finding that it would boost electric bills for 200,000 customers by, on average, $70 a month.

He also skirted the legal reason for the denial—lack of demand—perhaps because Consumers’ plant postponement plainly backed state regulators’ findings.

This rhetoric from lawmakers—including top dogs like Speaker Dillon and Representative Elsenheimer—is a far cry from what they should be saying. Instead of trying to bully the governor into approving unneeded, expensive, dirty coal plants that discourage clean energy development, they should be taking advantage of the current fall in demand to fashion far-sighted, innovative state policies that point Michigan away from coal and toward clean power.

This would lead to far more jobs than even three or four new coal plants.

It’s the kind of growth that Colorado, which is investing heavily in wind power, or California, which is moving quickly toward solar power, or Ontario, which is embracing both, now enjoy.

Are We Alone?
But the Rogers City controversy continues. In the past few weeks MPSC, perhaps tired of attacks on its expertise, has responded strongly.

When The Alpena News editorialized that regulators got their Rogers City cost estimate terribly wrong, and when Wolverine officials were quoted in the Presque Isle County Advance saying the same thing, the agency fired off letters to both papers, replete with real-world examples of just how seriously the company was low-balling costs.

The letter to the Alpena paper compared Wolverine’s estimate to established costs of specific new plants around the country—including Consumers’ last estimates for its suspended Bay City proposal. All of those costs were far higher than those quoted by Wolverine, which, unlike Consumers, has never built or operated a coal plant.

The MPSC letter concludes that Wolverine’s estimate is way out of line and that the company “is essentially indicating that they can construct and operate a coal plant at a significantly lower cost than utilities around the country who have more experience building and operating power plants. Michigan is not alone in its desire to protect ratepayers from the excessive increases to their utility bills that would be experienced if such a proposal were to move ahead.”

But when it comes to depending on Michigan lawmakers to defend utility customers from big, new-coal-powered rate jumps, we are alone—just as we seem to be when it comes to accelerating the growth of a clean-energy economy.

That is because many lawmakers remain indifferent to stronger clean-energy mandates and “feed-in tariffs,” or FITs, which would allow homeowners and small businesses to sell solar or wind power to utilities at a profit.

Advocates have been trying more than two years to get state Representative Jeff Mayes—a Bay City lawmaker who praised the state’s decision to allow Consumers to trade in five old coal plants to build one new one—to hold a House Energy and Technology Committee hearing on FITs. In the past few months, they have also tried to get his committee to look at stronger efficiency and renewable mandates, initially unveiled 13 months ago by the ReEnergize Michigan campaign.

But FITs continue to languish, with nary a hearing, even as states like Vermont, cities like Gainesville, Fla., and the province of Ontario install the policy, and even though FITs were introduced in Lansing much earlier.

The proposals to raise Michigan’s efficiency and renewable mandates continue to face stonewalling, too.

About two months ago Representative Mayes finally agreed to hold a hearing on part of this package—increasing energy efficiency mandates—on May 25.

But hours after MDNRE denied the Rogers City permit, he abruptly cancelled the long-sought meeting. It has yet to be rescheduled. Tomorrow, however, his committee will hold a hearing on stolen electricity—something that, unlike efficiency or FITs, his friends in the utility industry care about.

Meanwhile, House Speaker Dillon, who could easily pressure Representative Mayes to move on efficiency, FITs, or renewable mandates, continues to run as a green gubernatorial candidate.

But until there is some House action on any of these bills, Mr. Dillon is just blowing smoke that smells an awful lot like the stench of burning coal.

Jim Dulzo is the Michigan Land Use Institute’s managing editor. Reach him at jimdulzo@mlui.org.

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