Permit denied by state after nearly 1,000 days of consideration
by Richard Lamb, Advance Editor
With five years of planning and millions of dollars already invested in the project, that is the question facing Wolverine Power after its major permit was denied Friday. The Michigan Department of Natural Resources and Environment (DNRE), with the support of the governor?s office, said no to Wolverine?s air quality permit, nearly 1,000 days after Wolverine filed the request.
?After careful consideration of the issues and pursuant to the delegation of authority from the director of the DNRE, I have denied permit to install No. 31-707,? said G. Vinson Hellwig in his letter of denial dated May 21. Whether that letter ends Wolverine?s attempts to construct a 600-megawatt state-of-the-art clean coal-fired power plant in the Calcite quarry remains to be seen, but an appeal of the decision within 60 days in circuit court is a likely option.
Although Hellwig was the designated ?decision-maker? a press release from the office of Governor Jennifer Granholm made the decision public Friday afternoon. ?The release came from the governor because this is a very important issue, not that other permits aren?t,? said Liz Boyd, press secretary and communications director for the governor.
The governor said the state?s decision was based largely on findings of the Michigan Public Service Commission (MPSC), which said ?the company failed to demonstrate the plant was needed to meet future supply needs,? an opinion not shared by Wolverine. Strangely absent in Hellwig?s letter is any reference that the proposed plant would be unsafe to the environment or outside the law regulating plants of this type. The new plant would certainly be subject to stricter standards on the federal and state level than any existing power plant as it would have to meet tougher laws. The ability of Wolverine to meet safety and environmental laws, which were studied at great length for more than two years by DNRE permit engineers, were not mentioned in Hellwig?s letter.
What was repeated in nearly every paragraph of Hellwig?s denial letter were the opinions of the MPSC. He cited future demand for power, alternatives which Wolverine will need to secure once its contract expires with Detroit Edison in 2011, and the estimation by the MPSC that Wolverine?s rates would increase to ?the highest rate in the nation after Hawaii.? Hellwig also cited the MPSC report which claimed Wolverine had not ?adequately demonstrated its inability to secure long-term power supply arrangements to meet its member needs.?
The MPSC staff said building the proposed plant ?would increase electricity rates paid by average residential customers to 20.7 cents per kilowatt-hour. The 59.2 percent rate increase would cost the average residential customer $76.95 more each month,? according to the figures from the MPSC.
Wolverine has publicly disputed each of Hellwig?s reasons for denying the permit. Wolverine has stated their demand for power is increasing, even as demand in higher industrial areas is falling. In response to the MPSC report last fall saying the power plant was not needed Wolverine said ?the MPSC staff report suggests no meaningful or superior alternatives for Wolverine to meet its obligation to its member-cooperatives in 2012 and beyond.?
Instead of squashing the hopes of those looking for an economic shot in the arm, Granholm saw the denial as a way of protecting northern Michigan residents from the perceived high cost of the new plant. ?We are protecting hundreds of thousands of Michigan homeowners, businesses, and farmers from paying a whopping increase in their electric bills, which would have been among the highest in the nation,? Granholm said. ?The cost of doing business in Michigan would have skyrocketed, and despite the short-term gain from its construction, this project would have been a job-killer and a roadblock in our efforts to bring new economic development investments to Michigan.?
Boyd focused on the MPSC estimation of the cost of the plant instead of the criteria of ?science and the law? which DNRE staffers said from the beginning of the permit process would be used to make the decision on the permit application. In a public information session at Rogers City High School in October 2008, DNRE permit scientists agreed that the plant, as presented in the permit, would be safe and within the parameters of the law. Boyd explained how the economic side came into play when she contacted the Advance Friday.
?Clearly this is an issue about protecting consumers, protecting ratepayers and protecting the long-term job prospects in the state of Michigan. It is really about protecting. It is actually protecting hundreds of thousands of households and customers who would have obviously gotten their energy needs
?We understand the short-term jobs which would have been created in the construction industry to build that plant. But when people who reside in the area learn that this plant would have increased their average utility bill by more than $76 per month that as a result of this plant, they would have paid some of the highest utility rates in the nation, I suspect maybe they would rethink the implication of this plant on their lives,? Boyd told the Advance.
Boyd said the Wolverine Power plant, as proposed, could actually be detrimental to future economic development in the region. ?We want to make certain that Michigan is an attractive place for businesses to locate. There is no denying that if that part of the state had some of the highest utility costs in the nation, no business would want to locate there,? Boyd said. ?What we are trying to do here is insure that the area remains viable.? Not all would agree with that opinion.