Michigan Decision - Retreat to the Rust Belt?

It’s hard to square today’s decision of Michigan’s Department of Environmental Quality to issue a permit to an unnecessary, conventional coal-burning power plant, with Governor Granholm’s push to make Michigan a leader in the clean energy economy.  The plant, proposed by Consumers Energy, will tie Michigan’s economy to an electricity source that will be costly, create a massive new source of air pollution and saddle Michiganders with the liability of increased global warming emissions.  It’s like investing in typewriters, or dial-up internet service, except this decision is not just an economic loser, it also jeopardizes public health and the environment.

Moreover, the plant simply isn’t needed

Power demand in Michigan is down, way down, and not expected to be increasing for another decade.  NRDC commissioned a study by Synapse Energy Economics that described the vast potential for Michigan to satisfy the electricity needs of its residents, businesses and industry using cost-effective clean energy resources.  That study found that even assuming some existing power plants in Michigan retire, there would be ample clean resources to replace those plants and meet any additional demand without the construction of a new power plant. Moreover, Michigan Public Service Commission largely agreed with that assessment in its own analysis.  http://efile.mpsc.state.mi.us/efile/docs/15996/0190.pdf

This permit decision is wildly inconsistent with Governor Granholm’s goals for Michigan.  Here’s what she said in her May 2009 submission to the Huffington Post:  “Out with the old gas guzzlers of the past. Out with the old thinking of the past. Out with the old politics of the past. Out with the old rust belt. May was the first month of the New: new technology, new ideas, and a new era of cooperation that will purposefully drive Michigan and America into the new clean-energy future.”

These are not just empty promises – until now, the Granholm administration has taken concrete steps to shift Michigan’s reliance on old coal plants to clean energy investments including energy efficiency and renewables. 

So why take a major step toward the old rust belt energy economy? 

The plant’s proponent, Consumers Energy, points to jobs in construction and operation of the plant.  But the research is clear that the same amount of investment in retrofitting homes or wind power will create double the jobs created by investing in a coal plant.  http://www.peri.umass.edu/fileadmin/pdf/other_publication_types/green_economics/economic_benefits/economic_benefits.PDF

Consumers Energy also argues that the new plant will allow them to retire older, dirtier coal plants.  Retiring old plants is good, but replacing them with another conventional coal plant isn’t good enough. It’s like finally getting around to switching out your 1950-era Packard with a 1973 Lincoln Continental – sure, its better, but you aren’t getting modern safety features or fuel economy. Same thing with the new coal plant---not a good investment, and one that Consumers wouldn’t make if they were paying with their own money.  Instead, they’ll pass the costs of the plants, and the risk of the investment, onto Michigan electricity customers.

Michigan can still avoid tying their energy future to this coal plant.  The Public Service Commission will have to decide this year whether to issue a Certificate of Need for the plant, which would allow Consumers Energy to pass through the costs of the plant to ratepayers.  The Commission’s role is to ensure that bad energy investments are not passed on to ratepayers, and this certainly qualifies as a bad investment.  Governor Granholm has pledged that Michigan will lead the way to a clean energy future, and will prosper as a result.  Let’s hope that the PSC is truer to Granholm’s vision than the DEQ seemed to be today, so that they can make her vision a reality by rejecting this boondoggle. 

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