MPSC report calls CFB plant ‘one alternative out of a range of alternatives’ for Wolverine
Reports issued Tuesday by the Michigan Public Service Commission (MPSC) staff to the Michigan Department of Environmental Quality (DEQ) gave two less than shining reports regarding two proposed new power plants in Michigan. Regarding the Wolverine Clean Energy Venture, a 600-megawatt power plant proposed for Rogers Township, the MPSC found that ?Wolverine Power Cooperative failed to demonstrate the need for the proposed facility to meet its projected capacity.? In a separate report issued Tuesday, the MPSC also gave a discouraging report on Consumers Energy?s project in Essexville, suggesting it delay its project until older power plants are retired.
Wolverine is not deterred by the report, but is not pleased with it either. ?The permitting agency is still the DEQ and the attorney general issued a fairly strong statement that essentially pointed out that the governor does not have the authority to require this sort of thing and that is why (we filed the alternatives analyisis report with the MPSC) voluntarily,? said Ken Bradstreet, director of communication and government affairs for Wolverine.
Bradstreet said that although the unfavorable opinion of the MPSC doesn?t strengthen Wolverine?s case, it is not definitive. ?This is not to suggest that because the staff people at the MPSC have viewed our need differently than we view it that therefore we can?t build the project,? Bradstreet said Wednesday morning.
This week?s reports seem to indicate a change of direction as the MPSC had previously called for the need for one or two new baseload generating plants in a recent study called the ?21st Century Energy Plan.? ?Michigan?s load growth is expected to grow an average of 1.2 percent per year over the next 20 years. Recognizing that the average age of Michigan?s power plants is 48 years, and that no Michigan utilities have undertaken baseload construction in almost 20 years, it is important that a new baseload plant can be built and financed while protecting customers from unnecessary costs. Modeling shows a need for a new baseload power plant no later than 2015, and since build time on a baseload plant is at least six years, the state should take action now,? the 2007 report, submitted to Governor Jennifer Granholm, reads.
?It is a very nearsighted position to suggest that since we don?t need power this minute that we shouldn?t be building power plants. You are almost assuming that we are going to be in a perpetual unending depression so that we will never need the power. The fact is that it takes many years to build a project and the economy goes up and down,? Bradstreet said. One of the main reasons to construct the plant in Rogers City, Bradstreet said, is the uncertainty of a power source after 2011. Alternatives were considered but the plan presented is the best, he said, for Wolverine?s members.
FOR WOLVERINE, Tuesday?s report comes as the co-op awaits word from the DEQ on its air quality permit, considered to be the major hurdle to be cleared before the Wolverine board of directors would make a final decision to build the project. It is unclear how much the MPSC report will influence the DEQ in its decision making process. Wolverine and DEQ officials had said a decision on the permit was likely by the end of this year. Wolverine filed an alternatives analysis (EGAA) June 8 for its proposed new coal-fired plant near Rogers City in Presque Isle County and the report issued Tuesday came after analysis of that document and consideration of public commentary filed by July 8. In its conclusion section of the 47-page report on Wolverine, MPSC staff acknowledged that ?staff contends that a full spectrum of risks should have been considered within the framework of Wolverine?s EGAA as it relates to long-term investment decisions of this nature.?
In accordance with the memorandum of understanding (MOU) between the two state agencies made out in April based on direction from Governor Jennifer Granholm, MPSC staff reviewed Wolverine?s alternatives analysis (EGAA) for the proposed coal-fired electricity generating plant to assess whether energy efficiency, renewable energy, or other alternatives meet future electricity needs.
According to the report, MPSC staff made the following findings: ?1. Wolverine failed to demonstrate the need for the proposed facility as the sole source to meet their projected capacity. In particular, long-term purchase power options were not fully explored as part of their analysis. It should be noted that the majority of Wolverine?s long-term projected capacity need is based upon the expiration of power purchases (540 MW) on or before December 31, 2011. Wolverine has presented no evidence that the capacity currently supporting this existing contract will be unavailable in the future.
?2. Staff notes that the proposed circulating fluidized bed (CFB) plant is one alternative out of a range of alternatives that may be used to fill the projected capacity need. Other alternatives that may fill all or portions of the projected capacity need include; energy efficiency and load management; renewable resources; or a combination of a number of alternatives that could include lesser amounts of purchased power.
?3. Further given Michigan?s current recessionary condition and uncertainty concerning the time frame for recovery, Wolverine?s forecasted demand growth of approximately 2.0 percent appears questionable, or optimistic, and the risk associated with this uncertainty was not fully addressed.?
On April 1, the MPSC entered into a MOU with the DEQ that clarified each participant?s role and responsibility regarding a review process to evaluate electric generation alternatives and provide technical assistance to the DEQ. The DEQ is charged with determining whether an application filed to construct a new coal-fired electricity generating plant meets the requirements of Michigan and federal air quality laws and requirements.
The MPSC had two tasks, pursuant to the MOU: ?Providing technical assistance to the DEQ on all matters related to the need for electric generation in the state, as it relates to the analysis that looks at alternatives to coal-fired generation.
?Reviewing the alternatives analysis to assess whether energy efficiency, renewable energy, or other alternatives me
In a related story, the MPSC also gave a discouraging report to Consumers Energy, which seeks to build a new 930-megawatt (gross power output) coal-fired Advanced supercritical pulverized coal boiler, steam turbine generator, and auxiliary processes and equipment at the existing Karn-Weadock Generating Station in Essexville. That report found that Consumers Energy?s ?long-term capacity need is unjustified without the explicit retirement of existing capacity in its baseload generation fleet.?