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More roadblocks for power plant work

Date Posted: September 25 2009

The Michigan Public Service Commission dropped a bombshell report on the state utilities, contractors and the building trades Sept. 8, by releasing its findings during the application process that said the construction of two power plants in Michigan representing billions of dollars in work is unnecessary.

The pending work has long been regarded as Michigan’s own long-term stimulus program, representing at least $3 billion in construction activity. The construction or modification of other smaller coal-fired plants that are also in the works could make the economic impact exceed $6 billion.

But environmental groups concerned with the plants’ use of coal as fuel have apparently won the argument with Gov. Jennifer Granholm and state regulators, although a Consumers Energy spokesman said there still remains a path for constructing a new plant.

The MPSC – an agency within the Granholm Administration’s Department of Energy, Labor & Economic Growth – didn’t necessarily use the green argument as justification for coming to their conclusion. But construction of the plants and their economic impact were denied just the same.

“We’re outraged,” said Michigan Building and Construction Trades Council Secretary Treasurer Patrick Devlin. “Given the economy of this state, it’s beyond me how anyone who wants to move Michigan’s economy forward and create good-paying jobs could possibly shoot down billions of dollars in construction work.

“The utilities say we need these plants. They’re ready to fund them. We have people ready to build them tomorrow, if needed. And now this. It’s an infuriating decision.”

Consumers Energy has before the state an application to build a $2 billion, 830-megawatt coal-burning unit at its Karn Weadock facility near Bay City. The MPSC report said concerning that application, “Consumers Energy's long-term capacity need is unjustified without the explicit retirement of existing capacity in its base load generation fleet.”

Regarding Wolverine Power Cooperative’s application for a proposed $1.2 billion coal-fired plant near Rogers City, the MPSC report said: “Wolverine failed to demonstrate the need for the proposed facility to meet its projected capacity.”

Building trades union leaders met with Granholm after a portion of her state-of-the-state message on Feb. 3 took the building trades and the state’s utilities by surprise.

In that speech, Granholm basically removed her support for construction of coal-fired plants in Michigan, in favor of environmentally friendly alternatives. “So here’s our next aggressive goal,” Granholm said. “By the year 2020, Michigan will reduce our reliance on fossil fuels for generating electricity by 45 percent. We will do it through increased renewable energy, gains in energy efficiency and other new technologies. You heard me right: a 45 percent reduction by 2020.”

The Granholm Administration appeared to soften her stance and open the door for coal-plant construction just before the Michigan Building and Construction Trades Council Legislative Conference started in Lansing on April 1.

Lt. Gov. John Cherry told building trades delegates that utilities applying for new plant permit applications would only be asked to submit a “carbon reduction strategy” to the state Department of Environmental Quality, and to apply, presumably from the federal government, for pollution controlling carbon reduction technology grant money if it becomes available.

“If they (the utilities) apply for a permit, they will get a permit. It’s that simple,” Cherry added.

Well, maybe not so fast.

“Now with the Michigan Public Service Commission report,” said Michigan Building and Construction Trades Council President Patrick “Shorty” Gleason, “the governor has flipped, flopped, and flipped again on this issue.”

Consumers Energy spokesman Jeff Holyfield said while the utility was “disappointed with the conclusion of the report, and the coal critics called it a death blow, we think the report still provides a path for us to build a new clean coal plant.”

Holyfield said the report isn’t the final word on the matter. And he said Consumers Energy feels it can move forward toward building a plant within the language of the report.  For instance, the report called for the utility to outline a retirement plan for part of its existing fleet of power plants, which average 50 years of age. “That just becomes a question of timing,” Holyfield said.

He said Consumers will continue to keep up with permit requirements by various state agencies in an effort to keep the construction timeline moving forward. Because of the added state permit requirements, the timeline for the start of construction – if shovels ever hit the dirt – would be later than previously planned, in 2013. About 1,800 Hardhats would be on the job at peak employment.

The Michigan Public Service Commission’s argument against the proposed Wolverine Plant is more to the point. They think the new generation provided by the plant is unnecessary.

A statement by Wolvering said the report “ignores the facts of Wolverine’s power supply situation and the realities of today’s wholesale electric marketplace and is potentially devastating for Northeastern Michigan’s economy.”

Wolverine said  the MPSC report did not identify a lower cost alternative to the Rogers City plant  for generating power.

Rally time: To protest the decision of the Michigan Public Service Commission – as well as the  anti-coal plant construction attitude of the Granholm Administration – a building trades rally will be held at noon on Tuesday, Oct. 6 on the steps of the State Capitol Building in Lansing. Wear your hard hat, colors, and bring a friend.