Today, Michigan relies on coal for the majority of its energy. But that's about to change – with no clear answer about what's going to replace it. That unknown is creating concern and a charged debate locally and statewide.
First the why: Nine coal plants (with an electrical capacity serving 1 million people) will be retired in 2016 due to tightened federal regulations for carbon dioxide emissions –with more regulations and more likely coal plant shutdowns looming after that under a proposed federal Clean Power Plan.
For some, the worst case scenario could be power shortages or increased likelihood of electric outages – relatively minor inconveniences. But if you’re a power supplier or a large energy user, the future could be dire.
“This is an incredibly serious issue facing Michigan,” says Dan Bishop, director of media relations for Consumers Energy. “A lot of capacity is being removed.”
Seven of the coal plants are owned by Consumers; the other two by DTE Energy.
A new report commissioned by the two utilities says Michigan will fall below the standard for reliable electrical supply in early 2016, leaving an adequate supply of electricity for residents and businesses in question.
“The resulting retirement of approximately 60 percent of our coal-fired generation and 30 percent of our total generation will have an adverse impact on generation capacity,” says DTE Regional Manager Steve Rawlings. “Capacity shortfalls threaten electric affordability and reliability.
The concerns quickly trickle down from suppliers to users. Take, for instance, Traverse City manufacturer Century, Inc. The company operates a heat-treating facility – one of the most modern in the country – and pays an electric bill of $100,000-plus per month.
Kent Wood, director of government relations for the Traverse City Area Chamber of Commerce, says the issue of “uncertainty” is a big one for the Chamber and companies like Century: What will energy look like, what will it cost and how reliable will it be?
“A lot of our business energy users are looking to expand and need to know they are going to have reliable energy and that it’s going to be affordable … and by and large they don’t care where it comes from,” says Wood.
While Consumers’ Bishop says no one is predicting brownouts or blackouts in 2016, power companies must do something to address the loss of output.
“We are going to be buying a large 540MW natural gas plant in Jackson, Mich., which will partially replace the output being lost,” says Bishop. The company will also be purchasing energy on the open market.
Beyond that, the utilities, large energy users, chambers and others are all looking to Lansing for a balanced energy policy for the state – one that respects environmental efforts to phase out coal and replace it with cleaner sources -- while keeping energy output high and costs low.
Wood says the TC Chamber is supportive of an “all of the above” approach when it comes to the impending energy supply shortage.
“Everything from standard renewables to clean coal or biomass, increasing natural gas or possibly nuclear,” says Wood. “There’s not just one solution.”