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Michigan’s “Energy Epicenter” Turning Black, Not Green

Coal plant proposals could overwhelm governor’s alternative energy vision

August 10, 2007 |
Great Lakes Bulletin News Service

Channel 3 News
  Michigan has 20 coal-fired power plants in operation, including this one near Holland, and energy companies want to build at least four more in the state.

Governor Jennifer M. Granholm’s efforts to make Michigan the "alternative energy epicenter of America" is yielding some progress, but not nearly enough to keep Michigan competitive with other states, according to energy experts, academics, and government officials in and out of Michigan.

Many of these same experts and officials interviewed by the Great Lakes Bulletin News Service also pointed out that the two-term Democratic governor chooses not to talk about a very different, more potent trend taking shape in the state’s energy markets: The proliferation of new proposals to build coal-burning power plants, the dirtiest way to manufacture electricity.

Citizens are already battling proposals for multi-billion dollar coal plants in Rogers City and Midland because such facilities cause acid rain, smog, mercury pollution, and contribute heavily to global warming.

And the list of proposed Michigan coal plants is growing: In recent months a Florida company announced its intention to build a coal-powered plant in Alma. Several more utilities say they are also considering such plants, but have not yet made public their locations. For example, Consumers Energy filed a statement with the Michigan Public Service Commission in May that said it intends to build a 750-megawatt coal-fired plant on one of four potential sites that are under review, including Luna Pier in Monroe County.

Some energy experts say the contrast between the governor’s oft-stated intentions about alternative energy and the state’s budding coal rush reflects uncertainty in energy markets, the aversion to risk among utility executives and government officials, and a shift in Ms. Granholm’s own focus.

In 2003, when she first took office, Ms. Granholm earned a national reputation for developing innovative policies on energy, natural resources, and other important sectors of the state economy. But, driven by the state’s fiscal deficit and struggling economy, she changed course and embraced an aggressive, business-friendly pledge to, as she frequently states, "go anywhere and do anything" for jobs.

The question, say critics and supporters of the governor, is whether that pledge should include using 19th-century boiler technology and an 18th-century fuel source to power a 21st century economy—and whether that will do nearly as much for Michigan as conserving energy and developing cleaner sources of electricity?

Many critics of her evolving position on energy clearly do not think so. A study last year by the Renewable Energy Policy Project, a Washington-based energy research group, estimated that developing a robust alternative energy sector would produce 34,777 jobs in Michigan—far more than the perhaps 400 permanent new jobs that the four proposed coal plants would generate.

Other States Far Ahead and Prospering
Michigan’s progress on alternative energy development includes Michigan State University’s announcement in June that it would share a $125 million grant with the University of Wisconsin to establish a national bio-energy research center. Michigan’s bio-fuels industry, powered principally by corn and soybeans, now numbers six plants—five more than in 2005. And several alternative energy companies, such as United Solar Ovonics, Tellurex Corporation, and Diversified Natural Products, are making Michigan their home.

Meanwhile, as Michigan’s drive to become a green energy epicenter encounters clouds of coal dust, states such as California, Oregon, and Massachusetts are not only restraining the development of new coal plants, they are also aggressively encouraging the expansion of alternative energy capabilities. These states, according to the Union of Concerned Scientists, a Washington-based, nonprofit, science-policy research group, invest billions of taxpayer dollars to encourage fuel- and money-saving energy efficiency programs. They also offer incentives to promote wind farms, solar panel manufacturing plants, hydroelectric generators, and other green power technologies.

Studies indicate that in all three states, focusing on alternative energy generated new jobs. For example, according to one study, over 5,400 alternative energy companies do business in California today. The same 2006 study, by the Renewable Energy Policy Project, estimated that California’s alternative energy sector would employ 95,616 jobs when it is fully built out, perhaps within a decade.

Massachusetts’ Division of Energy Resources is seeing similar results. The division reported in June that clean energy is poised to supplant textile manufacturing and become the state’s 10th-largest industry. The state now has 556 alternative energy companies that employ 14,400 people. The number of jobs in the alternative energy sector is growing there by 20 percent a year, according to the agency.

Some Michigan lawmakers are frustrated that their state is not keeping pace.

"Michigan has been stuck doing the minimum, not being aggressive on renewable energy or energy conservation," said state Representative Robert Jones, a Democrat from Kalamazoo, who’s sponsored or co-sponsored several bills that promote energy efficiency and much cleaner energy sources.

"Other states are really leading the way and reaping the benefits, and not only in renewable energy that they’re producing, but also in research and technology," he added. "It’s costing Michigan jobs. And it will drag, and continue to drag, our economy down. The states that are pressing towards as much self-sufficiency as they can are seeing their economies really grow and take off."

Some Green Strides
By any measure, changing how Michigan powers its homes, offices, businesses, and industries is as difficult as it is basic to economic well being, according to economists.

That may be why, along with recruiting United Solar, Tellurex and other alternative companies to Michigan, the Granholm administration counts among its renewable energy achievements two developments that Michigan’s beleaguered auto companies warmly support but many alternative energy experts view with skepticism.

First, the state now has two bio-diesel and four ethanol plants, while various companies now plan to build 14 more. One of the proposed plants, which would be built by the Mascoma Corporation, would mark a significant technological advance because it would produce cellulosic, not corn-based, ethanol—a process that while more environmentally benign, has yet to prove its commercial viability. The plant could begin operation in 2009, according to company officials.

Second, Michigan recently established incentives of $5,000 to $10,000 for the installation of bio-fuel pumps in the state. There are more than 50 currently operating in Michigan. Ms. Granholm’s goal is to have 1,000 pumps operating by the end of 2008.

"Governor Granholm is a huge advocate of renewable energy and believes renewable energy markets are key to revitalizing Michigan’s economy," said Michelle Begnoche, the governor’s spokeswoman.

The Bottom Tier
But energy experts assert that, car-friendly bio-fuels aside, Michigan is actually lagging far behind other states in building and encouraging a 21st-century energy supply.

For instance, despite multiple bills sitting in legislative committees since 2003, the state has yet to enact a "renewable portfolio standard"—a requirement that utility companies use renewable energy sources for at least a certain percentage of the electricity they sell. Twenty-four other states already have these so-called RPS requirements, which require companies to buy or produce some of their electricity from wind turbines, solar panels, dams, or geothermal or biomass processes.

Michigan also has not established a renewable energy fund, meaning that the state has no money set aside for either promoting or developing alternative energy sources. Fifteen other states have such funds. Taken together, these states will have more than $4 billion budgeted by 2017 for recruiting and granting incentives to companies that generate energy from renewable sources.

Ironically, in another crucial area of alternative energy development—energy efficiency—Michigan once had a nationally renowned program. But former Republican Governor John Engler dismantled most of that program in the early 1990s, and the state is now at the back of the power-saving pack. Incentives for purchasing energy-saving light bulbs and appliances, and much stronger insulation standards for buildings simply do not exist here.

In fact, Michigan has only one incentive program left: rebates to low-income consumers who weatherize their homes to cut heating costs.

According to Martin Kushler, the utilities director in Lansing for the Washington-based American Council for an Energy Efficient Economy, Michigan’s alternative energy program ranks "very poorly" in comparison to other states.

"On the renewable side we have basically nothing, so you could say we’re tied for last in that respect," said. Dr. Kushler. "On energy efficiency overall we did a scorecard and Michigan ranked 34th. We’re definitely in the bottom tier. Everyone wants to say positive things about renewable energy and energy efficiency. But you can’t just talk about these things. You have to put money into them."

18th-Century Fuel Source Powering 21st Century Economy
What is attracting the most money for energy investments in Michigan at the moment, however, is new coal plant developments. In collaboration with local governments in Presque Isle and Midland Counties, energy company owners are racing to gain land use and construction permits.

In Alma, M and M Energy, a Florida-based energy development company, has proposed building a multi-billion dollar "poly-generation" coal-fired electric generating station on the site of a shuttered oil refinery. The company presented its plan to the state Senate Energy Committee in mid-April and has been busy shopping the idea in and out of Michigan.

Part of what may be driving Michigan’s coal rush is a controversial report that the Granholm administration published at the beginning of this year. The report, The 21st Century Energy Plan, said it may well be necessary for Michigan to build four new coal-fired power plants.

But the report also added an important proviso that power company executives usually fail to mention when explaining why they want to build more coal plants: Three of those plants would be unnecessary if, by 2015, Michigan was getting 7 percent of its power from renewable energy sources and took some modest energy-saving steps.

Some alternative energy proponents, however, insist that the state could eliminate the need for even that one additional coal plant, also known as a "base-load plant," if it installed more aggressive energy conservation measures and higher goals for green energy sources—something that at least one bill languishing in the state Legislature would establish.

Dr. Kushler agrees with that argument.

"I believe that quite clearly given the results from other states," he said, "we can avoid the need for any additional base-load power plants."

The Granholm administration report, moreover, was especially critical of the hazards of continuing to rely on coal to provide electricity. "Coal-fired generation is a major source of air pollutants, including mercury, nitrogen oxides, and sulfur dioxide," said the authors of the study. "Perhaps more significantly, coal-fired plants are the major source of carbon dioxide—the primary component of greenhouse gas."

Meanwhile, the governor has yet to express concern about Michigan adding one or more coal plants. However, according to her spokeswoman, the governor remains committed to protecting the environment.

"Any new plant would be required to meet all air-quality criteria and strict emission standards," said Ms. Begnoche in an email message, "as well as the three factors Governor Granholm considers when looking at any proposal for generating additional energy in the state: Reliability, cost, and the capacity to drive future growth."

Leah Burcat, a student at Haverford College, is reporting and writing on the Michigan Land Use Institute’s news desk this summer. Reach her at leah@mlui.org

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