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State Punts on New Coal Plants

Decision interferes with Granholm’s green jobs strategy

December 29, 2009 | By Jim Dulzo
Great Lakes Bulletin News Service

Sierra Club
  Tuesday’s decision ignores the growing pushback by citizens against new coal plants in Michigan.
The Granholm administration’s decision to allow a new, unneeded coal plant to be built near Bay City—and to postpone action on another unneeded plant proposed for Rogers City—will only delay what the governor says is her top goal: transforming Michigan into a manufacturing center for the nation’s and the world’s emerging clean-energy economy.

The administration’s decision, announced Tuesday in Lansing, seems like a huge misstep.

Over the past year, Governor Granholm assembled a group of policies, projects, and personnel dedicated to scoring big on energy independence. Wisely, the governor’s playbook depended on energy efficiency and renewable energy to both lessen the state’s heavy dependence on fossil-fueled electricity and bring new jobs to the state. She set her public service commission to work writing some of the strongest state rules in the nation for pushing clean-energy development forward.

Coach Granholm marched her team way down the field, but then, with a historic goal line within reach, she punted.

Her administration’s decision, released Tuesday morning by the Michigan Department of Environmental Quality, does at least admit that the state doesn’t really need additional electricity: The agency told Consumers Energy, which proposes a 930 MW coal plant near Bay City it inaccurately describes as a “clean coal” facility, that it must switch off some of its older, smaller plants if it is to build its new one.

And MDEQ’s non-decision on the Rogers City plant, proposed by Wolverine Power Supply Cooperative, seems intent on pushing Wolverine to rethink its plans for 600 megawatts of new coal power—significantly more than its customers use today or could anytime in the foreseeable future.

But the decision seems to throw away some key aspects of her clean-energy game. It will cost Consumers’ customers—and Wolverine’s, if its plant is approved—more money. It does little to point the state toward the smarter, more prosperous, jobs-rich energy future that she’s pushed so hard for over the past few years.

And it does almost nothing for a top goal of both her Michigan Climate Action Council and the Midwestern Governor Association: reducing greenhouse gases.

Costs and Jobs
The Consumers decision will be costly to its ratepayers because new coal plants are very expensive, and the price of coal will only continue to rise in the medium and long term.

The far better alternative, which the Michigan Land Use Institute and its sister organizations around the state strongly favor, is requiring Consumers and Wolverine to spend their big bucks—between the two proposed plants, that’s close to $4 billion—on making their customers’ homes, offices, schools, and factories more energy efficient.

That would free up far more watts per dollar spent than building new plants would—and keep energy dollars in the state, rather than headed for Wyoming, West Virginia, or other coal states.

But choosing the more expensive, dirty route to new energy supplies also has another bad effect: Building new coal plants produces fewer, not more jobs than employing energy efficiency and renewable energy sources.

Fifteen hundreds jobs—the figure commonly quoted for building a big new coal plant—looks like a lot, but consider: The jobs are temporary, very concentrated in one geographic area (the plant site), and help only the heavy construction trades.

And that is the oddest thing about the decision: The administration that said okay to new coal power Tuesday is the same one that established new policies that, if operated in a setting where new coal power is off the table, would trigger spectacular job growth in all sorts of geographical areas and trade groups.

Those Granholm policies include “pay as you save” energy efficiency programs that remove the up-front cost of retrofitting buildings, and “decoupling” programs that allow utilities to profit not from selling electricity but from helping their customers save energy and money.

Real Need
Most homes and many businesses in Michigan badly need efficiency retrofits. That’s a huge amount of new work of all kinds, spread all over the state, not just concentrated in Bay City or Rogers City. Carpenters, plumbers, electricians, laborers, retailers, truck drivers, engineers, designers, architects, and more can be kept very busy for a long time, because retrofitting Michigan’s leaky old building stock is a massive job.

Combining such smart, ambitious policies with last year’s state legislative mandates for more utility-based renewable energy would convince clean energy device manufacturers of all sorts that Michigan, with its huge but idled manufacturing base, really is where the action is.

And it would keep a lot of hardhats busy retrofitting factories and installing hundreds, even thousands, of wind turbines.

But not when other states in the region have stronger efficiency and renewable energy mandates—and are not hosting new coal plant projects. Why try to build a wind turbine factory or new wind farms in a state with an overabundance of coal power?

With the MDEQ decision behind them, officials from Consumers will now be very busy tracking down the money, approving the plans, and hiring the personnel to build its coal behemoth. They’ll be busy arguing with the Michigan Public Service Commission about why it’s okay to raise rates sooner rather than later to pay for the plants. They’ll be busy exporting more energy dollars outstate to buy more coal.

And they’ll continue to look at energy efficiency and renewable energy as a nagging thing they have to do to keep the state happy--rather than as a genuine business opportunity.

It’s not exactly a formula for clean-energy success. It’s a formula to preserve the status quo. It’s like GM announcing it wants to build a new, slightly more efficient Hummer plant to position itself for the future.

A year from now, when the Granholm team is headed for the locker room, many of them may well wonder: With victory so close, why on earth did we punt?

Jim Dulzo is the Michigan Land Use Institute’s managing editor. Reach him at jimdulzo@mlui.org. Tom Karas is the founder of Michigan Energy Alternatives and Co-opConversations.org. Reach him at logman39@hotmail.com.

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