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 http://docs.nrdc.org/energy/files/ene_09081101b.pdf 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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Michigan utilities could save 15 million mwh of electricity every year by investing in energy efficiency, enough to cut total electric use by about 14 percent. They would save their customers 2 dollars for every dollar they spent on programs to help people purchase energy saving measures like appliances, motors or insulation. And they would simultaneously reduce global warming emissions by many millions of tons each year.
So, why haven't they already taken advantage of this clean, cheap and abundant resource?
Part of the reason is an obscure artifact of traditional utility rate regulation that rewards utilities financially when they make big capital investments, like building a power plant, and penalizes utilities with lower revenues if sales decline. So, it's no wonder why utilities spend a lot of time trying to figure out how to get their sales to increase, and trying to build big, polluting power plants.
There are fairly easy ways to change this, and Michigan regulators took a big step in the right direction this week. On Monday, the Michigan Public Service Commission approved a measure that would allow Consumers Energy, one of the two large electric utilities in the state, to "decouple" its revenues from its sales. In other words, if they invest in energy efficiency as a priority resource, and sales go down, they will still be able to recover their costs to provide electric service and their shareholders won't take a hit.
The regulators are allowing this decoupling measure on a pilot basis, and will make it more permanent only if the utilities respond by increasing their energy efficiency goals. This creates critical alignment between the need to eliminate wasteful energy use and the utilities financial interests.
Decoupling is a win-win for electric ratepayers. First, they see lower electric bills because they need less power to light their homes and offices, or power their equipment. Second, the utility is not allowed to "over-recover" its fixed costs, which happens under traditional ratemaking policy. The Lawrence Berkeley National Lab has performed extensive analysis on the effect of decoupling on utility shareholders and ratepayers. http://eetd.lbl.gov/ea/ems/reports/lbnl-1598e-ppt.pdf.
NRDC applauds the Michigan PSC for taking this step to make Michigan a clean energy leader.
Read more about Michigan's clean energy potential here: http://docs.nrdc.org/energy/files/ene_09081101b.pdf
]]>Most Midwesterners wouldn’t leave the refrigerator door standing open, wouldn’t open the windows while the air conditioning is on, and wouldn’t choose to use expensive power plants to do a job that could be done with a portfolio of lower cost, cleaner energy resources. But, for a variety of reasons, our utilities have for decades ignored the availability of a vast reservoir of clean energy efficiency potential and have instead invested in more expensive and more polluting resources.
That has begun to change, and not a moment too soon, as we face the twin challenges of rebuilding our economy and solving the climate crisis.
Today, Governor Quinn signed legislation to expand the successful energy efficiency standards that were adopted in 2007 for electric utilities to also cover the state’s natural gas utilities. Under the new law, Illinois natural gas utilities will be required to use energy efficiency technologies such as more efficient furnaces, windows or insulation to lower demand for natural gas by an increasing amount each year, ramping up to 1.5% by 2019. This measure will lower natural gas use in Illinois cumulatively by 7% over the next 10 years.
Under the 2007 law, Illinois’s electric utilities have already begun to offer energy saving programs that will ramp up over the next 6 years to reducing electricity demand by 2% annually. The Illinois electric utilities have already avoided the emission of roughly 200,000 metric tons of carbon dioxide, and at a net negative cost to electric customers because the energy savings is more than offsetting the costs of power that would otherwise have been consumed.
On Monday, Governor Nixon of Missouri will sign legislation to spur the same kind of investment in Missouri. Under S.B. 376, Missouri utilities will be able to use energy efficiency as a resource, just like they can use supply-side resources like coal, nuclear or wind and solar power, but at lower cost than any of those supply-side resources.
Illinois and Missouri are not the only Midwest states that are taking advantage of the enormous potential of energy efficiency to save money, reduce pollution and create clean energy jobs. Ohio and Michigan have adopted energy efficiency standards for their utilities and are in the first year of offering new programs to help their customers save energy. In the Detroit area, DTE will invest $127 million to save 6.6 billion kilowatt hours of electricity. They will avoid $489 million in cost of generation and transmission of power, and thus will save $362 million over the life of the programs.
Investing in energy efficiency is a Midwestern trend that would make our pragmatist ancestors proud, and one for which future generations will thank us.
]]>We’re not talking about building every structure to the super-efficient LEED Platinum level – these codes simply incorporate measures that are so widely available and cost effective that it makes sense to require in every new building. We’re being outdone by states like Georgia, Louisiana, and Kentucky.
Thankfully, not all homebuilder trade associations are quite as shortsighted as the Ohio Homebuilders Association. In a triumph of reason, the Illinois Homebuilders have weighed-in supporting state legislation that would adopt the latest national model energy efficiency codes as the standard for all new construction in the state. If all goes as planned, that legislation will be on the Governor’s desk later this week.
Here’s why this matters. A home built today will last for more than 50 years or more – my home in Chicago is 112 and holding strong. If the builder cuts corners to shave a few hundred dollars off the construction costs, that home can cost its owner hundreds more each and every year in energy bills. A 2007 study showed that the 2006 code would save homeowner more than $400 per year in energy costs compared to the average home built under current practices in Illinois. Going back and retrofitting that home with energy saving measures later is a lot more costly than just incorporating good design practice at the outset.
In addition to saving homeowners money, more efficient building codes have the added benefit of reducing our need to burn fossil fuels, which causes global warming. According to the Building Codes Assistance Project, a statewide residential code in Indiana would cut emissions of global warming pollution by 2.8 million metric tons cumulatively over the next 20 years.
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