Michigan Ratepayers Can’t Afford House Dem’s Coal Proposal

The Michigan House Democratic caucus, standing behind House Leadership, announced today it’s “Jobs Now” platform.  The proposal includes a provision to reverse policy regulating the building of new coal plants in Michigan established during the Granholm Administration.  In a press release today the Dems write, “Building a clean coal plant will create up to 5,000 jobs and help attract new employers to the state, and an approval process was established through energy reforms championed by House Dems in 2008.”  They take it one stop further and criticizing Granholm for adding “a layer of regulation that has blocked the building of two plants.”

If the Democrats supporting this proposal want to create jobs, unburden Michigan electric rate payers, and bolster Michigan’s economy they have completely missed the mark.  Bizarrely, the proposal brazenly ignores a barrage of data indicating that energy production from new coal-fired power plants is too expensive and not needed in Michigan!

But don’t take our word for it.  We’ll defer to the agency required by law to monitor, analyze, and forecast energy demand and prices for the state of Michigan – The Michigan Public Service Commission (MPSC).

“We know that the cheapest energy is the energy that is never used,” says MPSC Chairman Orjiakor Isiogu.

Chairman Isiogu is referring to the Michigan’s relatively new Energy Optimization (EO) programs that which have been incredibly successful so far.   On November 30, the MPSC issued its 2009 EO report indicating that program “savings exceeded their targets by 37 percent.  Customers will see savings of $404 million over the lifeline of the measures installed.”  The report continues, “Conservatively, every dollar spent on an energy optimization program yields three dollars in cost savings to ratepayers.”

More, the MPSC continues to indicate weak demand and plenty of capacity well into the foreseeable future.  Even in the case of an unpredictable surge in demand, Michigan utilities can purchase external electricity supply from wholesale markets.

The case against coal in Michigan right now is so easy to make that, despite being a dedicated environmental group, we don’t even need to bring the toxic pollutants, heaps of coal ash waste, and pulverized mountaintops into the debate – though they certainly should be a part of any serious discourse.  But in Michigan that’s not necessary – the economics for energy efficiency and against new coal make a strong enough case on their own.

When directly comparing energy efficiency programs to the cost of new coal production it’s not even close.  The MPSC estimates the levelized cost of Michigan’s energy optimization programs cost about $30 per megawatt hour compared to that of a new super-critical coal plant at $133 per MWH.

Finally, Michigan imports the vast majority of its fuels for electricity and transportation – including 100% of its coal and uranium, and 97% of our petroleum.  With every unit of fossil fuel imported, Michiganders export their cash – precious capital needed in-state now more than ever.  Investing in energy efficiency in our neighborhoods and business means jobs are created locally and cash is kept in-state.  Investing in coal means our cash is sent to Wyoming or Appalachia and Mercury is sent into our environment.

House Dems should do everything possible to forestall the production of new coal in Michigan, at the very least until it is proven cheaper than energy efficiency, and only if ratepayers can be assured there are no lower cost options out there.

0 replies
  1. marko
    marko says:

    This may all be true, but if we do need energy in our state, i would rather send our money to Wyoming that the Middle East.

    Reply
  2. Dave
    Dave says:

    Two different fuels for differnt uses, Marko. Besides, our oil comes from Canada, Mexico, Alaska, and Venezuela. Middle East oil is a small fraction. It mostly stays in Asia.

    Reply

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