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Difficult to light a fire under several big power plant projects

Date Posted: April 24 2009

LANSING – A powerful boost could be coming to Michigan’s construction industry over the next decade. But for the thousands of Hardhats sitting on the bench – who are ready for work, now – the waiting is the hardest part.

The status of two major Michigan-based power plant projects were outlined at the 50th Legislative Conference of the Michigan Building and Construction Trades Council held April 1-2. (A project that falls under a different category – a nickel mine near Marquette – is described below). But several other power plants in the hopper are in various stages of the state and federal permitting process. All told, there’s about $22 billion in potential power plant construction.

The projects, if they happen at all, can’t come quickly enough. Here’s a rundown of what’s in the works, and why construction isn’t starting anytime soon. (Hint: the state Department of Environmental Quality is mentioned frequently. Obtaining financing is no doubt an obstacle, too).

Consumers Energy – A new 800-megawatt Advanced Super-Critical Pulverized Coal Burner is being proposed for construction on the grounds of the utility’s existing Karn-Weadock plant in Essexville, near Bay City.

The target for the start of construction: groundbreaking in 2012, with the construction process extending through 2017. Cost: about $2 billion. About 1,800 construction jobs would be created.

But construction of the plant is not a done deal. “This is far from over,” said Consumers Energy Vice President Jim Pomaranski to delegates of the Michigan Building and Construction Trades Council.

He said there are hurdles that first need to be jumped, including the state issuance of environmental permits, which are in progress. There are also going to be regulatory requirements for limiting carbon emissions, but Consumers “doesn’t know what those are going to look like,” Pomaranski said. There is also the issue of the state’s issuance of a certification of necessity, which was a major bone of contention between the Michigan Building and Construction Trades Council and Gov. Jennifer Granholm.

As we reported in our last two editions, Granholm shocked the state’s construction industry in her state of the state address by issuing new limits on the construction of coal-burning power plants. She instituted a new level of requirements for the state Department of Environmental Quality (DEQ) to get information from utilities as to whether the state even needs four new coal-burning power plants proposed around Michigan. After pressure from the building trades, she apparently backed off, leaving only a requirement for utilities to submit a “carbon reduction strategy” that Pomaranski mentioned.

Public comments are also being taken by the Michigan DEQ regarding whether the plant should be constructed. After all that is said and done, Consumers Energy must make the call that the plant is financially feasible.

Pomaranski said the new plant would be built south of the existing works at the Karn-Weadock site. If and when the new plant is up and running, plans call for the abandonment of Units 1-6 at the plant, with Units 7-8 kept in operation.

Pomaranski said the new plant at Karn-Weadock is part of $6 billion in construction that the utility intends to sponsor over the next five years at its existing power plants, and for new construction.

An outage is currently wrapping up at Consumers’ J.C. Campbell Plant, located between Holland and Grand Haven, and other environmental work will be going on at the Karn-Weadock plant. There are also miscellaneous infrastructure jobs, gas compressor work, and some $300 million in renewable energy projects that are in Consumers Energy’s pipeline.

DTE Energy, Fermi III – Michigan has an aging fleet of power plants, one of the oldest in the nation, with some power production units half a century old. “They’re doing yeoman’s duty, in no small part because your people have helped maintain them,” said DTE Energy Senior Vice President Ron May to delegates at the Michigan Building and Construction Trades Council’s 50th Legislative Conference. “But it’s not a bad idea at all to be looking at our choices for replacement.”

And DTE Energy’s primary choice for baseload power production is the construction of a new nuclear power plant on the grounds of the existing Fermi I and Fermi II plants near Monroe. Fermi II has been in operation since 1988, and Fermi I would be fully decommissioned during the construction process. But construction of Fermi III is still years away.

May said the process looks like this: DTE Energy applied to the Nuclear Regulatory Commission last September for a license to build a new nuclear plant. The NRC accepted the application, and is now in a 40-month review process that ends in spring 2012.

“Financing is currently risky, but by 2012, financing should be easier,” May said. When DTE Energy obtains the license to build, May said they have a 20-year period to construct the plant.

Fermi II produces about 1,100 megawatts. Fermi III, a new-design boiling water reactor, would be cranked up to 1,500 megawatts. Plans call for both to run simultaneously. DTE Energy spokesman John Austerberry said current plans call for Fermi II to operate through 2025, and beyond.

Construction of Fermi III would take six to seven years. The price tag for the work is a reported $10 billion. “This time frame doesn’t help you right now, but we’re looking at a construction period from 2018 to 2025,” May told the building trades. At peak employment, construction at the plant would employ about 2,500 Hardhats.

DTE is currently hosting the building trades for other jobs including pollution control work at the Monroe Power Plant, and an outage at Fermi II. Plans are also in place for the company to erect windmills in the Thumb.

May gave kudos to building trades workers hired by DTE. “I’m proud to say that when I speak to groups around the country, I tell them we have the best-skilled people,” he said. “I give your guys a lot of credit.”

He pointed out that on a New Mexico project power plant project, 75 percent of the construction workforce failed their drug and alcohol tests. “Stay strong on drug and alcohol issues, don’t let up on that,” he said. “It’s a voracious problem in other parts of the country.”

May added: “we will employ union labor. That is the promise. So let’s be the best.”

Wolverine Power Cooperative’s “Clean Energy Venture” – Proposed to be constructed in a quarry in Rogers Township is a $1 billion clean-coal burning power plant designed with two 300-megawatt boilers. The facility’s air permit application also calls for the use of up to 20 percent of fuel as sustainable biomass, such as switchgrass.

Wolverine Power is currently awaiting air quality permits from the Michigan Department of Environmental Quality. Craig Borr, Wolverine’s executive vice president, told Richard Lamb of the Presque Isle County Advance in late February that “we are hopeful the Michigan Department of Environmental Quality will take action on the permit sometime this year. We don’t know that and we have no guarantee of that, but we are optimistic we are going to see some action by the agency this year.”

If those permits are granted, Borr said, Wolverine would then make the go- or no-go decision for construction to start after a detailed financial evaluation

L.S. Power Group, Midland - A site located northwest of South Saginaw Rd. and Waldo Ave. is still the planned destination of a $2 billion coal-fired plant. Plans are moving forward to gain permits for the plant, despite the loss late last year of one of the partners in the project, Dynegy.

Joy Buchanan, a spokesperson for L.S. Power Group, said earlier this year it was continuing to work on plans and permit applications for the project.

The 750-megawatt complex is to be located on a 130-acre site. At least 15 state and federal permits must be obtained before ground for the new facility can be broken.

Ripley Heating Plant, Northern Michigan University, Marquette – The Ripley Heating Plant supplies steam to most of the NMU campus’ three million square feet of university facilities. The primary fuel for the heating plant is natural gas with fuel oil as a backup. The Heating Plant is also the primary distribution point for electricity purchased from the Marquette Board of Light.

NMU officials are proposing to add a Combined Heat and Power (CHP) Cogeneration addition to the existing plant. The project would utilize a high pressure boiler rated at 120,000-140,000 pounds per hour, capable of burning wood chips, coal and natural gas integrated with a 7-10 megawatt extraction steam turbine capable of producing the required University’s thermal and electrical needs. The $55 million plant addition would save NMU up to $1.9 million annually, depending on the mix of fuel.

According to SourceWatch, the state Department of Environmental Quality issued a permit for the university to proceed with construction last May. However, upon appeal, the Environmental Protection Agency’s Environmental Appeals Board effectively revoked the license to build, claiming the EPA must take into account the global warming effects of CO2 pollution.

Lansing Board of Water and Light – The Lansing utility is proposing construction of a 350-megawatt plant that would burn coal and biomass fuels like waste wood and waste crops or grasses.

The project is under review by the state’s Department of Environmental Quality.

The plant would be built next to the Board of Water and Light’s Erickson Station, and cost about $1 billion. The system’s aging Eckert station would eventually be closed and its output replaced by the power produced by the new plant.