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Groups Renew Push to Stop Bay City Coal Plant

Consumers board targeted over financial risks, higher rates, and toxic ash

February 26, 2010 | By Glenn Puit
Great Lakes Bulletin News Service

  Members of the statewide Clean Energy Now coalition say their fight against Consumers’ proposed coal plant is not over.

In December, when Consumers Energy received state permission to build a large, coal-fired power plant on the Saginaw River near Bay City, it marked a significant victory for the Jackson-based utility, which battled strong opposition to its plan.

But some of the citizen groups who say they oppose the plant because of its economic and environmental risks are insisting that their fight is far from over. They say that Consumers still faces difficult hurdles before it can actually get to work on the 930 MW project, which is large enough to supply power to several hundred thousand homes.

The groups, banded together as the Clean Energy Coalition, are raising some of those hurdles themselves as they push Michigan’s utilities to turn away from new coal plants and toward energy efficiency and renewable energy projects. They say both policies would save ratepayers money and help the state develop a jobs-rich clean-energy manufacturing sector.

Several of the groups are coordinating a petition drive and even sponsoring a video contest as part of a “corporate responsibility” campaign aimed at Consumers’ executives.

Another group, which owns stock in Consumers, is pushing the company to address what it says is an inadequate plan for storing the proposed plant’s millions of tons of toxic coal ash. The company is already drawing criticism for a coal ash landfill that critics say is leaking contaminated runoff into the Saginaw River and nearby Lake Huron.

Many of the same groups are also planning to ask the Michigan Public Service Commission to turn Consumers down when it applies for its final permit—the Certificate of Need that is required before the company constructs the plant close to Lake Huron, in Essexville. The certificate application, which Consumers will file later this year, is supposed to address the company’s power needs, current generating sources, and the cost of the new plant.

Susan Harley, of the non-profit citizens group Clean Water Action Michigan says the new plant does not make good business sense.

“There are a lot of people who feel this is a bad investment,” said Ms. Harley.

She said citizen groups hope to gather 8,000 signatures from the petition drive, and persuade both the MPSC and company officials that building the plant is “a huge gamble with their customers’ rates.”

Consumers spokesman Jeff Holyfield, however, says the plant is needed because energy demand in Michigan will eventually recover. He bristles at portrayals of the company as a coal-reliant dinosaur.

“If you look at our balanced energy initiative, two thirds of the projected new energy resources needed to serve our customers by 2018 is through renewable energy, efficiency, and ‘demand side management,’ which means reducing customer usage through peak periods,” Mr. Holyfield said.

The controversy continues even as the Granholm administration recruits clean-energy manufacturing companies and writes new regulations making it attractive for businesses and homeowners to install money-saving efficiency measures. The rules would also allow utilities to profit from financing such measures and selling less energy. Supporters of the rulemaking say that building a new coal plant sends the wrong message to the companies the administration is coaxing to set up shop in Michigan.

Tough Business
One of those supporters, James Clift, policy director for the Michigan Environmental Council, says that Michigan sends billions of dollars out of state each year to purchase coal—money that could be better spent creating jobs in Michigan.

“That money could provide for a lot of new economic development activity,” said Mr. Clift. “Wind turbines and solar power plants are the new targets for manufacturing, and shifting our investments there could help put our major manufacturing sectors back to work and keep all that money to buy fuel back here at home.”

Others who criticize Consumers’ proposal point out that power companies cancelled more than 100 coal plants in America over the last three years, and failed to break ground on a single new plant in 2009. That, they said, was largely due to financial reasons: rising construction and fuel transportation costs; uncertainty about new controls on coal’s heavy, climate-destabilizing CO2 emissions; and investor wariness about loans for multi-billion-dollar coal plants.

They add that, while so many coal plant proposals are dying, the new, clean-energy economy is providing one of the country’s few bright spots. The American Wind Energy Association, for example, says that 2009 was a banner year for that industry.

So, with both the Consumers plant and a smaller, 600 MW plant proposed for Rogers City still in play—the state has yet to decide about a Permit to Install for the Rogers City plant—Michigan remains at the center of the nation’s coal wars.

“For coal burning, outside of Texas, we are the only state that has an investor-owned utility proposing a new coal plant, so we really are at ground zero [of the environmental fight],” said Tiffany Hartung, of the Sierra Club Michigan Chapter. “To have this many proposed coal plants in a state that does not produce any coal at all just doesn't make any sense.”

Consumers’ Big Numbers
But Mr. Holyfield, the Consumers spokesman, said the coal plant is part of a balanced approach to energy. He said critics of the company are ignoring the company’s overall energy strategy, which increasingly relies on renewables.

Mr. Holyfield noted that the company would invest $1.2 billion for 450 megawatts of wind-power capacity and has easements on about 60,000 acres of land in Mason, Tuscola and Huron Counties. Mr. Holyfield said Consumers’ proposed plant would allow the utility to retire at least five older, dirtier coal-burners while meeting the utility’s critical need to provide “baseload” or continuous generation at a low cost.

In fact, in its December decision, the Michigan Department of Environmental Quality ordered Consumers to close between five and seven old plants in exchange for building its new one.

Consumers officials, who hope to have their new plant operating by 2017, say the project would create 1,800 construction jobs, about 2,500 indirect jobs, and more than 100 permanent plant jobs.

Media accounts say the plant will cost “$2 billion plus,” but environmental groups, citing a Consumers filing with state officials, say the figure is closer to $4 billion.

Mr. Holyfield said that number does not specifically apply to the proposed plant.

He could not say exactly how much the new plant will cost and how much it will push up electric rates, however, because that depends on construction costs and interest rates.

Several studies of the economics of new coal plants indicate that the cost of their electricity, exclusive of distribution charges, is likely to be double that of power from older, existing facilities.

Coal Ash Questions
Meanwhile, other organizations object to Consumers’ proposal on traditional, environmental grounds. The National Resources Defense Council, for example, opposes Michigan’s and the nation’s coal rush, which at one time included 150 proposed new plants.

NRDC calls Consumers’ future coal plant “a major source of pollution.”

“In addition to the mining of millions of tons of coal every year, water pollution, and heat discharges, and the need to dispose of vast amounts of polluted waste, the plant would (emit) 7.9 million tons of carbon dioxide (a year),” the NRDC said in a recent fact sheet.

“It’s like investing in typewriters, or dial-up Internet service, except this decision is not just an economic loser, it also jeopardizes public health and the environment,” said the NRDC’s Rebecca Stanfield in a recent blog.

Other coal opponents share NRDC’s concern about annually storing hundreds of thousands of tons of the plant’s coal ash.

In 2008 a Bay City environmental group, Lone Tree Council, uncovered documents from the state Department of Environmental Quality that showed that toxins from the ash piles at the Karn Weadock complex, where Consumers would build its new plant adjacent to three existing facilities, has leached into groundwater and nearby Lake Huronfor decades.

The Michigan Messenger reports that a California-based, non-profit group, As You Sow, which owns shares of Consumers stock, will promote a resolution at the utility’s next shareholders meeting regarding coal ash. It would require the company to account for its management of coal ash at all of its facilities.

“I know they have multiple coal ash sites,” said Amy Galland, research director for As You Sow. “It (coal ash) is highly toxic, they have multiple sites, and they don’t have a sustainability report. They don’t clearly disclose the actions they are taking to insure the coal ash is securely stored and what they are doing to prevent environmental and safety risks.”

Meanwhile, pressure on the federal government to write first-ever national regulations on coal ash storage continue to grow—a move that could drive up the cost of Consumers’ proposed plant.

On Wednesday, the Environmental Integrity Project, with offices in Washington D.C. and Austin, Tex., released a report in league with another non-profit, Earthjustice, finding water pollution problems at 31 coal ash sites around the country, including Consumers’ Karn Weadock site.

According to the report, the new findings push the total number of coal ash sites with identified water pollution problems to 101.

Consumers’ site, according to the report, has arsenic levels 100 times what the U.S. Environmental Protection Agency says is safe for public consumption. The report says that the leaks from the Consumers’ ash storage landfill have helped make Saginaw Bay one of Lake Huron’s official “areas of concern.”

But Mary Gaust, a Consumers spokeswoman, disagrees.

“We have been operating our landfills safely and in compliance with all environmental regulations for more than 50 years,” Ms. Gaust said in an email. “The claim in the report that the Karn Weadock ash disposal site contributed to the designation of Lake Huron as an International Area of Concern (AOC) is a misstatement of fact.  The data from our landfill was not used in making the AOC determination.”

Glenn Puit, an investigative reporter, is a policy specialist for the Michigan Land Use Institute. Reach him at glenn@mlui.org.

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