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If Renewable Energy is the Goal,

Why Did the Michigan Legislature Write an Open Check for Utilities to Build Coal Plants?

Editor, The Review

            Mother Nature has done much to ensure that our home is clean and secure.  Two hundred million years ago, she took untold amounts of poisonous compounds and elements out of Earth’s early environment, concentrated them, and buried them safely underground. 

            Today, we call that coal. 

            Now we are busy taking sixty million years of toxic waste and dumping it back into the environment in the span of about two hundred years.  Energy produced from coal is expensive, and the byproducts ruin our health.  Why then this recent drive to build more coal-powered electricity plants, when everything else points towards a cleaner future with renewable energy options?  Why this rush to coal?  Follow the money.

            In 2008, CMS Energy, the parent company of Consumers Energy, made $289 million in net income.  Not bad, even for one of the largest gas and electricity providers in the United States.  But CMS also had a negative cash flow of $135 million.  In fact, CMS has had a negative cash flow at the end of every year since 2006. To their American and international investors, this would indicate that CMS is headed in the wrong direction.  The question: How do we show our investors that we can restructure and stabilize our business interests?

            The Karn-Weadock plant in Hampton Township uses huge amounts of coal to run its baseload units.  But in the summertime, energy use peaks due to air conditioner usage.  Currently Consumers Energy must use its gas and oil fired units to cover peak demand—either that or buy energy on the open market from other producers.  Natural gas prices are not stable, so that while a natural gas fired plant is relatively cheap to build compared to a coal-fired plant, it can be unexpectedly expensive to operate.  Possible solution: If only there were someway we could get away with building another coal unit...

            Problems: With all the pollution controls currently required, coal plants cost alot to build.  Before legislation passed by the Michigan Legislature last year, utilities could not begin raising rates to cover new construction costs until after a plant was completed.  This means a huge capital outlay upfront for the 6 or 7 years of construction.  And with the move towards greener technologies on the horizon to produce electricity, by the time the plant is done, Consumers could be left with not enough customers to pay for such an expensive project after the fact.

            The much-touted Michigan Renewable Energy Bill of 2008, while doing really little to encourage any significant growth of renewables, did take care of many of the obstacles to CMS’s desire for a new coal plant.  First, it guarantees that 90% of the customer base will remain with DTE and CMS.  Next, once a project is approved, they can petition the Public Service Commission to raise rates immediately to pay for it.  In fact, if the PSC does not act, rates are raised automatically. By law, the PSC must set rates to cover utilities expenses, no matter how big of a boondoggle it is.  Finally, during the current regulatory process regarding the Karn-Weadock expansion, the Department of Environmental Quality has accepted a flawed permit that ignores recent regulations from the EPA regarding various types of pollutants—including CO2 and mercury emissions. 

            Another issue if we are thinking of building a coal plant: Utilities have to get approved for new coal plants NOW.  If they wait much longer, they will not be able grandfather in these misguided projects.  Once new baseload coal plants are built, there will be little incentive for these utilities to pursue investment in cleaner forms of energy. Hence, the present “Rush to Coal”.

            The proposed Karn-Weadock expansion in Hampton Township is a 930 megawatt plant.  130 megawatts of coal is burned just to run it.  Consumers plans on selling another 300 mw on the open market.  That’s right, local ratepayers pay for the plant, and Consumer’s sells the excess energy at a profit. 

            Not only are most of our legislators lining up behind CMS, but Chamber of Commerce, union and other local community leaders have been convinced to jump on the bandwagon as well.  Ten days before the DEQ hearing at Bay Valley Conference Center, CMS Energy’s David Joos hosted a party for dozens of supporters, including union officials and politicians.  Not surprisingly, when the hearings were held, huge signs touting the benefits of “Clean Coal” greeted attendees entering Bay Valley’s parking lot.

            I don’t want to imply that CMS or Consumers are somehow bad neighbors.  Safe and efficient production of electricity is vital to our society.  But the CMS Energy PAC spent over $186,000 on lobbying in Michigan last year during the election cycle.  That kind of money buys influence.  It buys legislation and loyalty from community and even union leaders, who should know better when it comes to big business.  

            Please remember this.  Electric utilities are monopolies, but monopolies that are regulated by state law.  This is still a democracy,  but we need to do more than vote every four years and watch CNN or FOX News every once in a while.  Nothing is going to work here unless we let those elected officials and regulators know we are watching and thinking about these deals being made.  Deals that lead to billions spent on projects we do not need, to be paid for through our electric rates.  Projects that will produce even more pollution as we strive to clean up our environment before it is too late. 

            Get educated.  It’s easy if you have access to the Internet—just be careful of who is providing the information. Most importantly, let your legislators, your community leaders, your regulators know what you think.  Ask questions.  The approval process for the Karn-Weadock expansion is ongoing.  Don’t be one of those good people who know better but who does nothing.  Don’t give up.  We need to actively get involved in our government and its interaction with big business or else risk loosing it to those with more money and influence.

Scott Miller

Bay City

EPA’s New Top Officials Will Pursue Dioxin Cleanup Action

            Dow Chemical Co. cleanup of dioxin contamination on more than 50 miles of Tittabawassee and Saginaw river shorelines is an apparent top priority of President Obama’s new team at the Environmental Protection Agency.

            Mathy Stanislaus, second in charge at the EPA behind new administrator Lisa Jackson, attended a public meeting June 17 at Saginaw Valley State University. So did Robert Sussman, the EPA’s chief legal counsel. Jackson earlier had sent an in-depth letter to riverfront residents and other interested parties, vowing “to accelerate this cleanup and deal with the pressing threats to human health and the environment.”

            Environmental activist Michelle Riddick of Saginaw says Jackson’s statement, reinforced by Stanislaus and Sussman, signals a hopeful turn of events. George W. Bush’s EPA team acknowledged the presence of dioxin but never described dioxin as a public health threat, Riddick notes.

            Participants at the meeting learned that the EPA is aiming for a draft report on dioxin cleanup by the end of this year, and a final report before the close of 2010. Riddick says optimism is guarded because this is the fourth timeline that has been established.

            “The true litmus test will come when Dow fails to meet that first deadline, then what is the EPA going to do?” Riddick says.

            Dow Chemical has received past grace periods orchestrated mostly by Republican state legislators, and even Democratic Lieutenant Governor John Cherry intervened at one point. Riddick says the EPA, as a federal force, possibly will be more immune to political pressure.

            Jackson has announced Superfund status for mid-Michigan dioxin cleanup, but has not placed the project on a national priorities listing. Riddick describes this scenario as “Superfund Lite,” which means environmental activists will need to maintain attention and pressure.

            Another sign of increased EPA attention, however, is that a community involvement coordinator has taken an office at the Saginaw County Courthouse for direct oversight. He’s Don deBlasio and he can be reached at deblasio.don@epa.gov.

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