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TCL&P Seeks Clear Path to Clean Energy

Utility wants residents’ advice on moving from coal to local green power

December 4, 2009 | By Glenn Puit
and Jim Dulzo
Great Lakes Bulletin News Service

  Traverse City Light & Power and Northwestern Michigan College placed the region’s largest solar panel array online in October of 2006.

TRAVERSE CITY—In a state where two utilities are pursuing approval for new coal-fired power plants, this town’s municipal electric utility is striving to go in a different direction.

Traverse City Light & Power is asking residents to help them settle on a plan for reaching an ambitious goal: providing 30 percent of its electricity from renewable sources by 2020—roughly three times more than the standard the state set last year for all Michigan utilities.

“It’s a switch from coal-based generation to renewable generation,” said Ed Rice, the utility’s executive director. He explained that the company wants to make the switch because “there’s a lot of concern...about investing in more coal generation.”

Mr. Rice discussed possible plans for generating more renewable energy at his city-owned company’s open working sessions earlier this week. He said the company wants to draw exclusively on the region’s local natural resources—wind, landfill gas, sunshine, and especially wood—to meet its 30 percent goal.

But the renewables path that TCL&P has scouted so far has proven to be a little rocky. Specifically, plans to install a wood-fired biomass power plant in the Traverse City area to provide the kind of continual, base-load electricity that coal plants generate has triggered sharp reactions from some residents.

That reaction prompted the utility to use Tuesday night and Wednesday morning working sessions to announce that it is listening to such concerns and is seeking more public participation in planning how to green up its energy supply.

During the sessions, Mr. Rice pointed out that TCL&P faces a conundrum: It wants to reduce its dependence on coal-fired power plants, but options beyond coal for providing a steady power supply unfazed by windless nights or cloudy days—the bugaboos of wind and solar power—currently are limited. They include building a natural gas- or biomass-fired power plant, or a hydroelectric dam.

Currently, however, hydroelectric power is off the table: TCL&P decommissioned several aging hydroelectric facilities on the Boardman River and has no plans to build new ones.

“We are nowhere near to the point that this is absolute,” Mr. Rice said of the utility’s renewables plan. “This is all a work in progress at this point.”

According to a motion approved Wednesday morning by TCL&P’s board of directors, that work will come in a number of steps. The directors told the company to choose the appropriate renewable energy generation sources, execute a credible public information program and dialogue about them, continue exploring construction of a new biomass plant, and increase its expertise and understanding of the economic impacts of different renewable energy sources.

The board’s decision marks another unusual move for the city-owned power company. Thirteen years ago, TCL&P was the first utility in the state to build and operate a large-scale wind turbine. Three years ago, it installed northern Michigan’s largest solar panel array in collaboration with Northwestern Michigan College. Early this year, it adopted its remarkably aggressive 30 percent renewable energy goal; meeting it would make the company the state’s leading utility, percentagewise, in renewable energy.

Praise, Critiques, and Choices
TCL&P’s hot pursuit of green power drew strong praise from area environmentalists and business officials, if not instant agreement on all of its details. Most environmentalists lauded TCL&P’s intention to move away from coal as good for public health and an important step in slowing climate change.

“Seeking a 30 percent renewable standard is an outstanding and ambitious goal,” said Greg Reisig, of the Northern Michigan Environmental Action Council. “My belief is there should be a community-wide discussion of all the new energy options to see which ones people prefer.”

And a spokesperson for the local business chamber said that going so green so quickly could create lots of new business opportunities in the region.

“I think any company or any business jumping on 30 percent renewables is making a bold move, and we wholeheartedly support it,” said Doug DeYoung, of the Traverse City Area Chamber of Commerce.

He added that the region must “look at the future and look at all the opportunities to use renewables and other technologies. Anytime new technologies are being tried, you are going to create jobs.”

Advocates of building a biomass plant said that such a facility would also draw on some old technologies, such as harvesting nearby wood waste, tree trimming, and dedicated woodlots for fuel—all labor-intensive activities.

But some others, including local resident Jeff Gibbs, object to a wood-burning plant. He said he is worried about the effect their emissions would have on public health, global warming, and local forests.

“It’s easy and straightforward to cut down trees and burn them in power plants,” Mr. Gibbs told the utility’s board of directors on Tuesday night. “There aren’t enough of them to go around, yet (the utility’s future plan) is something that is new information, so we are all going to have to sit down and crunch the numbers.”

Meanwhile, other clean-energy advocates want TCL&P to think less about new power generation and more about promoting energy efficiency among its customers more aggressively. That, they point out, would automatically reduce consumption from coal-fired power plants, save customers money, and create a large number of weatherization and building-retrofit jobs.

The utility said its renewables plan assumes 1 percent annual growth in demand for its electricity; efficiency advocates have long argued that concerted efforts could reduce individual household and business energy demands in most parts of the country by 20 to 30 percent.

The company said it might launch a program that, like efficiency projects, would directly affect homes and businesses by spurring installation of small-scale renewable energy sources—a pilot feed-in tariff project. FITs require a utility to pay profitable rates to customers for the electricity they produce from their own, self-installed solar panels or wind turbines. Pilot programs elsewhere in the country, including one conducted in Michigan by Consumers Energy, indicate that such a program would be extremely popular in Traverse City—and, as with energy efficiency projects, trigger significant local job growth.

The Big Picture
Some clean-energy advocates also point out that significant TCL&P investments in home and business efficiency or feed-in tariffs would mesh well with new policy and financing initiatives that are either underway or under consideration in Lansing—some of it driven by federal green jobs money now pouring out of Washington, D.C.

Besides executing the federal government’s financed weatherization program for low-income households, the Granholm administration is now working on a “pay as you save” financing system that would eliminate upfront costs for major home and business efficiency improvements. It is also drawing up new rules allowing utilities to base their profits on helping customers use less electricity, rather than simply selling more of it.

Meanwhile, the state Legislature may soon begin work on a new package of clean energy bills promoted by some House Democrats and the ReEnergize Michigan campaign. That package includes feed-in tariffs, additional efficiency and renewable energy mandates for utilities, and tighter building energy codes. Each could help TCL&P attain its clean-energy goal. 

At Wednesday’s meeting, TCL&P Chairman of the Board Linda Johnson said that the utility would ultimately act on what its customers—city residents and businesses—say they want. Her comments implied that she realizes the utility’s 30 percent goal makes it a clean-energy leader in the state, and that the decisions the community and its municipal electric company make will have an affect both locally and around Michigan.

“There is an increased awareness about the importance and vision of Traverse City Light & Power,” Ms. Johnson said. “This is significant, and its important we realize the scope of the projects we are working on, but they have to be done.

“Our portfolio needs to be diversified,” she added. “It can’t be all coal-based or biomass based. Keeping it diversified will be the most important thing for securing our energy future. We are going to look at all angles and come up with a solution that meets the needs of our ratepayers and citizens.”

A poll of TCL&P customers conducted by Northwestern Michigan College in August indicates that the company has strong support for adding wind and solar power to its generating base, and tentative support for building a biomass plant. Eighty-five percent of residential and commercial customers surveyed said they supported investments in wind and solar power, with 7 percent opposed and 8 percent undecided. Forty-four percent endorsed investing in a biomass-fueled power plant, 19 percent were opposed, and 37 percent were undecided.

Mr. Rice indicated that his company would hold another public information and comment session on January 4 of next year.

M’Lynn Hartwell, a local environmental activist who strongly opposes building new coal plants but is also wary about biomass, said that it’s important that TCL&P move forward.

“I want to see this community make an intelligent decision," she said. "We are at a tipping point locally and globally, and we can't afford any more missteps.”

Jim Dulzo, the Michigan Land Use Institute’s managing editor, can be reached at jimdulzo@mlui.org. Glenn Puit, a policy specialist at the Institute, can be reached at glenn@mlui.org. Traverse City Light & Power has contracted with the Institute to produce a community guide to energy efficiency that will be published in the spring of 2010.

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