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The Path to Green Power Goes Through Manistee

Washington and Lansing Ain’t Much Help

April 23, 2004 | By Jim Dulzo
Great Lakes Bulletin News Service

MLUI/Kimberli Bindschatel

Traverse City Light and Power built Michigan’s first large-scale wind turbine generator in 1996. Because of federal and state policies, only two more have gone online in Michigan since.

MANISTEE — Responding to an effective critique by hundreds of citizens about the cost, environmental risks, and scant benefits of a proposed 425-megawatt, $700 million coal-fired power plant, Manistee city officials this month soundly rejected the plan. Now an Indian tribe that helped organize opposition to the coal-fired utility says it plans to build what it calls a pollution-free “green” power project that would consist of wind turbines and other renewable energy generators on a portion of the approximately 1,000 acres of land it owns in Manistee county.
“We want to do it to benefit the tribe, other citizens, and the community,” Lee Sprague, the leader of the Little River Band of Ottawa Indians, said in an interview with the Great Lakes Bulletin News Service. “We could be a major workforce that could install them up and down the state and nationally.”

Though the proposal attracted enthusiastic public support here when Mr. Sprague made it public in February, state and national authorities said that even a wealthy tribe like the Little River Band will have significant difficulty financing the project. Federal government support for clean energy alternatives, which gained momentum during the Clinton administration, has waned dramatically during the Bush administration. The president and his advisors are counting on much greater consumption of fossil fuels – especially coal — to supply the nation’s electricity.

The tribe also cannot look to the state government for much help. Though 38 states provide tax incentives to support renewable energy, Michigan is not among them.

Without U.S. and State, Tribe and Citizens Are On Their Own
The pitched battle to defeat the coal-fired power plant in this Lake Michigan coastal city, and the prodigious work that lies ahead to develop a more environmentally sensitive alternative, dramatically illustrates how complex changes in energy and environmental policy in Washington are producing real effects for citizens and their communities. The coal-fired power plant was prompted in large part by higher natural gas prices and the Bush administration’s direct support for fossil fuels.

Just as importantly, the swift transition from one popular campaign to block a polluting plant to another that develops a homegrown, cleaner alternative demonstrates how, in the absence of federal and state leadership, citizens are taking the initiative to work with business executives and local elected leaders to ensure this rural region of clean air and healthy forests remains that way.

Such struggles are occurring in countless communities across the country. Public opinion polls indicate that Americans strongly favor energy conservation and more green power projects. Renewable energy experts say, however, that the Bush administration is weakening air pollution control rules, and the proposed Energy Policy Act of 2003, now stalled in Congress, would offer few incentives to develop cleaner alternatives even if it passes.

“The United States has never had a consistent, comprehensive, or progressive national energy policy,” said Max Martina, executive director of the Alternative Energy Institute, a non-profit California-based group that promotes renewable energy. “Though some strides have been made within each presidential administration, in each case the gains were later reversed.”

Federal support for renewable energy reached its peak in the late 1970s under President Jimmy Carter. That year support for research and development of solar, hydropower, geothermal, and wind energy reached $1.9 billion, according to the Energy Information Administration, a unit of the federal Department of Energy. By 1988, the Reagan Administration had slashed the renewable energy budget to $269 million. President Bill Clinton increased the renewable energy research and development budget to $500 million in 2000, but under President Bush, the renewable budget has steadily declined to $357.5 million for this fiscal year.

In President’s Fossil Fuel Future Critics See Dirty Air, Ruined Land
During a visit last September to Detroit Edison’s enormous coal-fired power plant in Monroe, Michigan President Bush described how his proposed energy bill is designed to turn loose America’s creativity to find ways to burn coal more cleanly, encourage conservation, and enable the country to “become less dependent on foreign sources of energy.”

“We lead the world in new technologies when it comes to energy, and we not only can find new ways of producing energy and make sure we do so in an efficient way, we can make sure we do so in a clean way,” said Mr. Bush. “I'm confident in predicting to the American people not only can we promote job security and increase jobs, but we can do so in a way that protects our environment. I believe we have a duty to do so. I believe a responsible nation is one that protects the environment.”

But the Natural Resources Defense Council, a New York-based national environmental organization, asserts that the president’s rhetoric doesn’t match the reality of what would be a far more polluted and ruined landscape if the energy policy bill is approved. The current bill, S.2095, which the administration supports, contains approximately $14 billion in tax credits and subsidies, most of it aimed at companies that either extract or burn fossil fuels for power generation, says the NRDC. It is designed, the group says, to encourage more consumption of fossil fuels by easing air pollution rules, offering hefty incentive for burning coal, oil, and gas, and opening vast stretches of the public domain to mining and drilling.

The proposed energy bill also speeds approvals for building new power plants and distribution grids, increases incentives for offshore gas and oil drilling, and continues controversial liability protection for the nuclear power industry. The proposal is enthusiastically supported by Michigan’s utility industry, including William McCormick, Jr., the chairman of CMS Energy, who served on Vice President Dick Cheney’s task force, which wrote most of the bill. 
While environmentalists and the energy industry disagree about the effects of the proposal, one indisputable outcome is that the bill is clearly designed to increase coal production and use, which would moderate the price of electricity while offering nothing similar to help spur the development of clean, green power. “There is so much pork in this bill,” said Mr. Martina, “that it is very hard to chop through to the meat.”

Green Power Works….Overseas
Meanwhile, several other countries are taking a much different path. “The alternative energy industry is a $6 billion sector and employs approximately 100,000 individuals worldwide,” Mr. Martina said, adding that half of those jobs are in Denmark, which generates 20 percent of its power from wind energy. He predicted that the sector would grow to $10 billion by 2010 and would do even better if the U.S. enacted sweeping energy policy reforms: “Measures targeting renewable energy could more than quadruple that number to $25 billion and account for the creation of an additional 315,000 jobs in the U.S. by then, making the U.S. the leader in renewable energy employment.”

In response to the federal government’s disinterest in investing in renewable energy, green power entrepreneurs look to states for help. Advocates say the best way states can help grow green energy is to enact “renewable portfolio standards” that require utilities to include a certain percentage of green-generated power in their electricity mix.

Those that do — Texas, California, Minnesota, Indiana, Vermont, and nine others — are experiencing alternative energy booms, particularly with wind power. “It is interesting to note that when George Bush was governor of Texas,” said David Gard, a specialist at the Michigan Environmental Council in Lansing,  “he signed such a thing and the wind industry there has taken off like crazy. States that do this are either well on their way or are already exceeding their portfolio requirements.”

Michigan State Representative Chris Kolb, an Ann Arbor Democrat, introduced portfolio legislation in the state House (H.B. 4970), but Mr. Gard said lawmakers aren’t terribly interested. “Don’t expect it to go very far with the current leadership in the Legislature,” he said of the Republican-led state House and Senate.

Renewable Energy At Standstill in Michigan
Without federal support, including the renewable energy production tax credit that lapsed last year, or state portfolio standards and tax breaks, renewable energy development in Michigan is at a standstill. Traverse City Light and Power built the state’s first utility-scale wind turbine in 1996; five years later, a small startup company built the state’s only two privately owned turbines, near Mackinaw City. Little has happened since then, despite the efforts of developers such as that company’s founder, Richard Vander Veen, who now calls his firm Mackinaw Power.

Mr. Vander Veen continues to recruit farmers along the state’s windy Lake Michigan coast who are willing to lease small plots of land for large-scale turbines. He said he’s finding plenty of willing partners. But Mr. Vander Veen, frustrated by the unwillingness of Michigan utilities to sign long-term contracts to purchase power from the turbines, has joined another company, North American Wind Energy, to formally request that the Michigan Public Service Commission force Consumers Energy, a CMS Energy subsidiary, to greatly expand its green power purchase program.

The electricity from Mr. Vander Veen’s two turbines has been sold out through that program, which charges a small “green” premium to consumers willing to pay the higher rate, since the machines began operation. But the company refuses to expand the program. “Can we get the utilities to actually work with those who would want to be entrepreneurs, put up wind power, and take all the risks?” Mr. Vander Veen said. “The key piece is getting the utilities to sign long-term power purchase agreements.”

Without such contracts, federal production tax credits, state tax relief, and portfolio requirements, banks are unwilling to back commercial renewable energy projects, which they view as too risky.  In Manistee, the Little River Band does have some advantages that established wind developers lack, including sovereign-nation status, a hefty income from the large casino it owns north of the city, and access to federal programs for tribal green power development. But no one, least of all the tribe’s leaders, believes what lies ahead in developing cleaner energy sources will be easy.

Jim Dulzo, an environmental journalist, is the Institute’s managing editor. Reach him at jimdulzo@mlui.org. Keith Breuker, an Institute member, provided research assistance for this article.

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