Department of Natural Resources
May 21, 2010
Unnecessary plant far too expensive for Michigan ratepayers
LANSING - The Michigan Department of Natural Resources and Environment (DNRE) today denied Wolverine Power Supply Cooperative's air quality Permit to Install application for a new 600 megawatt power plant, fueled primarily by petroleum coke and coal, in Rogers City. The decision follows a thorough review of the permit application under state and federal law.
The state's decision is based 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.
The MPSC staff also determined that 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. Only Hawaii has a higher average kilowatt-hour rate.
"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," Governor Jennifer M. 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."
Granholm said that in addition to protecting ratepayers from being gouged with higher electric bills, the decision protects Michigan's environment from the pollution an unnecessary plant fueled primarily by petroleum coke and coal would produce.
Last year, Granholm asked energy experts at the MPSC to analyze whether there was a need for the proposed Wolverine facility and if there were alternative methods of meeting their customer demand. The governor also asked the DNRE to consider the MPSC analysis as part of its air permit review process, consistent with the department's duties under state and federal law.
The DNRE ultimately determined that Wolverine had not adequately demonstrated through the alternative analysis the inability to secure long-term power supply purchase arrangements, such as buying power from an existing power plant, to meet their member needs. Wolverine Power is a wholesale provider of energy to four electric cooperatives that include Cherryland Electric Cooperative, Great Lakes Energy, HomeWorks Tri-County Electric Cooperative, and Presque Isle Electric & Gas Co-op.
The MPSC analysis showed there were a number of alternative methods that would allow Wolverine to adequately supply its customers at a fraction of the cost of constructing a new coal-fired power plant.
Details of the review and decision along with a copy of the denial letter and the MPSC analysis can be viewed at www.deq.state.mi.us/aps/cwerp.shtml .
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