Environment Picture
Topic: Clean Energy

Reporters’ memo: Governor walks the walk on clean energy as coal industry throws a tantrum

The following is an edited version of a memo sent from the Michigan Environmental Council to Michigan reporters and editors on Feb. 20

Friday, February 20, 2009
From: Hugh McDiarmid Jr., Michigan Environmental Council
To: Reporters, Editors and other assorted reprobates
RE: Recent dustup about governor’s energy plan and status of coal power plant proposals

We’ve endured some fairly significant distortions of fact and logic from coal-based utilities and their supporters since the governor’s SOS speech and executive directive on energy. Specifically, they have asserted that the energy legislation passed last fall greased the skids for new coal-fired power plants in Michigan and that the governor has “flip flopped” by requiring utilities to prove coal plants are the most cost-effective and reasonable option for meeting electricity demand.

Most recently, House Speaker Dillon opined in a MIRS News story that the governor’s EO and speech are a “big policy change.” Speaker Dillon has vowed to investigate the issue more before determining whether to support the clean energy plan.

We expect he will find that the governor’s actions are entirely consistent with the letter and intent of the laws passed last fall. We also believe that Attorney General Mike Cox’s recent finding that the governor’s directive is legally unenforceable is erroneous.We expect that finding to be disputed by the Environmental Protection Agency when it reviews the AG’s argument.

The legislation passed last fall in Michigan is intentionally designed to delay the need for construction new electric generating facilities through efficiency measures and other tools that will create jobs and economic development in Michigan. It also requires public utilities to prove that a proposed new coal plant is “the most reasonable and prudent” means of meeting the power needs when measured against alternatives.

That’s why the environmental and public health communities supported the new laws, and that’s why we stand behind the governor’s implementation of them.

It appears that the utilities that supported the legislation now have a problem with its requirement that they prove a new coal plants are more reasonable, prudent and cost-effective options than alternatives like efficiency programs and renewable power. We have little sympathy.

The governor’s recent actions change NOTHING in the laws, except to level the playing field by requiring all power plants – including merchant plants, municipal operations and co-ops to adhere to the same IRP criteria as the big utilities.

Here’s what the legislation says (red sections are direct quotations are directly from either HB 5524 or SB213):

The legislation requires an integrated resource planning process that includes An analysis of the availability and costs of other electric resources that could defer, displace, or partially displace the proposed generation facility or purchased power agreement, including additional renewable energy, energy efficiency programs, load management, and demand response….

The PSC shall grant a request for a new coal facility if the utility has demonstrated, among other requirements, that the proposal represents the most reasonable and prudent means of meeting the power need relative to other resource options for meeting power demand including energy efficiency programs and electric transmission efficiencies.

An integrated resource plan shall be established that, among other requirements: Includes An analysis of the availability and costs of other electric resources that could defer, displace or partially displace the proposed generation facility … including additional renewable energy, energy efficiency programs, load management and demand response…….

Finally, nowhere in the legislation is there any language contemplating quick approval -- or even any approval – of new coal plants. In fact, the legislation required utilities file energy optimization plans (Eos) designed to delay the need for constructing new electric generating facilities and thereby protect consumers from incurring the cost of such construction.

Thank you, and feel free to call with any questions or formal interview requests for policy experts in the energy and environmental fields.

Hugh

(PS: Credit due to Dr. Marty Kushler of American Council for an Energy Efficient Economy and Frank Zaski of the Sierra Club for much of the analysis summarized here!)
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