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Coal Burning Plant Fires Up Hot Dispute in Manistee

Plan’s trail could lead to Lansing and Washington

February 15, 2004 | By Jim Dulzo
Great Lakes Bulletin News Service

MLUI/Jim Dulzo

Critics say a proposed coal powered electric plant on Manistee Lake would turn the city away from the tourist and luxury home-powered economic renaissance that has helped it survive a sharp decline in a once thriving industrial base.

MANISTEE — A proposal to build a $700 million, 425-megawatt coal-fired power plant is generating an intense local debate about energy, the environment, and quality of life in this coastal city that has been shedding its industrial past for new economic growth based on easy access to wide sand beaches and clean Lake Michigan.

Though the dispute is in its early stages – a public hearing to consider a special use permit for the 25-story plant is set for Thursday before the city planning commission – the trajectory of the disagreement between the plant’s proponents and its many critics could also reach deep into the administration of Democratic Governor Jennifer M. Granholm, and to the White House.

The Northern Lights plant would be the first coal-powered generating station to open in Michigan since 1990. The plant requires a state air emission permit from the Department of Environmental Quality that will test Gov. Granholm’s commitment to eliminate from Michigan by 2020 all polluting sources of mercury – a dangerous neurotoxin contained in coal. The Northern Lights plant also is influenced by White House proposals to weaken air quality standards for mercury, and by the Bush administration’s proposed energy strategy, which provides billions of dollars in tax breaks, subsidies, and direct grants to promote production of coal and other fossil fuels, and significantly diminishes public investments for cleaner alternatives.

No Middle Ground
In Manistee, a port city of 6,600, the significance of the Northern Lights plant is well understood by its friends and foes. Elected leaders, including first term Republican state Representative David Palsrok, who represents the county, are under pressure to take a public position. Questions about who wins and loses if the plant is built are now part of the regular civic conversation, as is whether an alternative plan proposed by an Indian tribe has merit.

Critics, including several local governments in Manistee County, say the new generating station would pour thousands of tons of toxic and smog-forming gases into the region’s air. They add that the proposal saddles residents with all of the financial and environmental costs and few benefits. Further, critics say, the plant would turn the city away from the tourist and luxury home-powered economic renaissance that has helped it survive a sharp decline in a once thriving industrial base.

Manistee County’s tourist economy is among northwest Michigan’s strongest. The most recent survey available, taken in 1996 by Michigan State University, pegged it at $74.8 million annually, ahead of all northwestern Michigan counties except Grand Traverse and Charlevoix. “If you put heavy industry in the center of this picture,” said Duaine Marquand, a longtime resident who served on the neighboring Filer Township Planning Commission, “you are driving good home development out of the area. Building this plant has to be a prime example of how to create sprawl.”

The plant’s owners, Manistee Saltworks Development Corporation, a subsidiary of Houston-based Tondu Corporation, did not respond to email or phone inquiries from the Great Lakes Bulletin News Service. But a February 3 press release promised that Northern Lights’ emission standards will be based on “best available technology” for nitrous and sulfur oxide emissions, and “maximum available technology” for mercury. The company said it will further reduce its nitrous, sulfur, and mercury emissions by, respectively, another 33, 40, and 81 percent from levels stated in the DEQ air permit application that was filed in October. “Our Northern Lights power project holds an exciting future for Manistee, our company, and the state of Michigan,” said Joe Tondu, the president, in another press statement.

Critics, however, raise doubts about the company’s commitment. By far, the plant’s most influential opponent is the Little River Band of Ottawa Indians, which owns a popular and profitable casino just north of Manistee. The tribe has hired technical experts and attorneys to make its case that building the plant would be a mistake for the region.

The tribe also has informed the Manistee Planning Commission that it wants to build an environmentally-sensitive alternative energy project based on wind, ethanol, and biomass. The tribe’s Little River Casino Resort has the financial strength to back such an effort. The casino attracts 1.6 million visitors annually, employs 900 people, more than any other employer in Manistee County, and has a $40 million annual payroll.

Lee Sprague, the Ogemaw or leader of the Little River Band, said that the tribe’s proposal would bring significantly more jobs to the region than the coal-fired plant, would be virtually pollution-free, and would reinforce the area’s recreational economy, anchored in part by the Little River Casino Resort. “All the profits would stay in the community,” Mr. Sprague said in an interview. “We can come up with something very unique here.”

Tondu History In Region Produces Discord
In 1990, Tondu Corporation built the last coal-burning power plant in Michigan, a much smaller 54 megawatt facility that produces electricity and steam from a site along Manistee Lake in Filer Township, which borders the city of Manistee. In the years since, the Texas-based company developed a somewhat stormy history here over paying taxes. It recently lost an almost nine-year, $800,000 legal battle with the township and Manistee County over its tax bill for the existing Filer plant.

If Tondu had won it would have bankrupted the township, according to Supervisor Dana Schindler, who added that many township residents dislike the Filer plant because of problems they relate to its air emissions. “There’s a standing joke in Filer,” Ms. Schindler said, referring to frequent complaints she says she receives about the plant. “If you wash your car at night you better put it in the garage or it will be black in the morning.”

Air quality is a source of contention outside Filer Township as well. Industrial pollution from Chicago and Gary, Ind., is thought to be an important reason that Mason and Benzie, the two counties immediately south and north of Manistee County, are out of compliance with federal air quality standards. In addition, since 1988 Michigan has issued health advisories for every inland lake because of mercury contamination in fish.

The growing list of citizen groups opposing Northern Lights includes Manistee Citizens for Responsible Development, formed specifically to stop the plant’s construction, as well as the Sierra Club, Aurora, the Lake Michigan Federation, Little Manistee Watershed Conservation Council, Asthma Coalition of Northwest Michigan, American Lung Association of Michigan, Northern Michigan Environmental Action Council, Spirit of the Woods Conservation Club, Manistee County Democrats, the Manistee Conservation District, and the Kalamazoo River Protection Association.

Local governments are also beginning to show official concern about the proposal. The County of Manistee; Pleasanton, Brown, Bear Lake, Onekema, and Cleon townships; and Bear Lake Village have each written letters expressing concern about the project and requesting that the City of Manistee conduct independent economic impact and environmental impact studies before moving forward with the project.

Another point of dispute is the effect that Northern Lights could have on Manistee Lake. Decades of unregulated industrial development severely damaged the lake, which is within the city’s borders and contains high levels of nickel, cadmium, and other toxic contaminants in its sediments. The lake is recovering but if Northern Lights is approved it will need to be dredged to accommodate the coal-loaded lake freighters hauling fuel to the plant. Dredging could stir up those heavy metals, which could then escape into Lake Michigan.

Mr. Sprague of the Little River Band said the dredging would seriously interfere with his group’s ongoing work to restore the lake’s population of sturgeon, a fish which the band holds sacred as a clan symbol and whose numbers have declined drastically in recent years. “Those sediments are going to disturb the water quality,” he said, “and the sturgeon, because they live so long, will build up huge mercury contents. And this is before the plant even begins operating.”

Problems Generated At Home, Power and Money Sent Abroad
By every measure, the Northern Lights plant is a big idea for this region. Its 250-foot tall main building and 400-foot smokestack would dominate Manistee’s Victorian-era skyline. The plant would consume 1.8 million tons of coal annually. As many as 13 coal-bearing lake freighters a month would ship the coal through the city to the plant, causing two draw bridges across the Manistee River to open and close every 30 hours during the heavy fall shipping season. Each day 50 tons of lime would arrive at the plant by truck. Other large trucks would make 21 trips a day to either of two nearby landfills with the plant’s voluminous solid wastes.

The plant would extract up to 6 million gallons of water a day from Manistee Lake to cool the plant’s boilers, and generate 750,000 gallons of wastewater daily, to be handled by an on-site disposal facility or the city’s adjacent wastewater plant. According to the Union of Concerned Scientists in Washington, D.C., a similar-size, 500 megawatt plant typically pours into the atmosphere 10,000 tons of sulfur dioxide, which causes acid rain, 10,200 tons of nitrogen oxide that leads to smog, 700 tons of carbon monoxide, which aggravates heart disease, and 170 pounds of mercury, which causes nervous system damage and birth defects. Documents filed with the state by Tondu Corporation indicate the proposed Manistee plant would produce 2,693 tons of nitrogen oxide annually, 4,444 tons of sulfur dioxide, and 80 to 100 pounds of mercury, making it one of the largest producers of mercury emissions in the state.

The plant’s financial details, which apparently aid communities in other counties but leave behind what critics say are scant economic returns for Manistee, also reach far and wide. According to newspaper accounts and documents obtained by citizen groups, the plant’s electricity would flow to participating members of two Michigan municipal electrical generating consortiums, Michigan Public Power Agency and Michigan South Central Power Agency, which would own the plant. Members of the consortiums include Bay City, Charlevoix, Chelsea, Harbor Springs, Hart, Holland, Lowell, Petoskey, Portland, Traverse City, Clinton, Coldwater, Hillsdale, and Union City. Participating cities could sell their excess power on the national electric grid. None of the plant’s electricity would flow to customers in Manistee.

The fact that the plant would be owned by tax-exempt municipalities, and not by a private company, eliminates the big increase in property taxes such large industrial projects can generate. If Northern Lights was privately held, the $700 million plant could generate at least $11 million in annual property taxes, according to a conservative projection by an experienced municipal tax estimator. But Tondu would not own the facility, and a consultant’s report reveals that the project budgeted only $400,000 in fees to local governments in lieu of local taxes — 96 percent less than what a privately held operation might pay.

Fred MacDonald, executive director of the Manistee County Convention and Visitors Bureau, who supports the proposal, said Manistee would be foolish to agree to such an arrangement. “All of these other cities are going to get power from this plant,” he said, “and resell it and keep all of the profit. That is not correct. We should get a significant tax base. I’m not talking a half-million dollars. That is a pittance.”



MANISTEE, Feb. 27, 2004  More than 300 people jammed a Manistee Planning Commission public hearing on Thursday evening, Februry 19, to voice their opinions on the construction of the proposed coal-fired power plant. Tondu Corporation President Joe Tondu, who is leading the campaign to build the facility, gave a 40-minute slide presentation about his proposal. He was followed by approximately 20 citizens who also addressed the commission. Speakers who said they oppose the plant outnumbered those who said they supported it by approximately a three-to-one margin. With more than 100 of the people who had signed up to speak still waiting their turn at 10 p.m., the commission called a one-week recess.

Last night's hearing attracted approximately 200 people. Those speaking against the plant outnumbered supporters by approximately a four-to-one margin. Opponents included a fish biologist, a retired toxicologist, a woman reading a letter signed by 10 medical doctors from Manistee, a local school teacher, and six grade school children. All but two of those who supported the plant were either construction workers who said they were eager to build the project or power plant operaters who worked in similar facilities.

Dan Behring, a leader of Manistee Citizens for Responsible Development, told the commission that a statement about Governor Granholm's position on the power plant made at last week's hearing by Lydia Murray, an employee of the Michigan Economic Development Corportion, was actually incorrect. Mr. Behring said that, in conversations last week with both Governor Granholm and her environmental assistant, he learned that the administration is officially neutral on the question. He added that the commission should expect to receive a letter confirming the governor's position in the next few days.  

At the close of last night's hearing, with dozens of people still waiting to testify, the planning commission announced that the proceeding would continue, and likely conclude, at the Manistee Middle School gymnasium, Sixth Street at Maple, next Thursday, March 4, at 7 p.m.

Jim Dulzo, a journalist and editor, is managing editor of the Michigan Land Use Institute. Reach him at jimdulzo@mlui.org.

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