NRDC, Sierra Club sue Michigan over permit for new coal plant

Opponents of new coal plant development are fighting back in court.

The Natural Resources Defense Council and the Sierra Club filed suit against the state of Michigan in Ingham County Circuit court this week, arguing that the Michigan Department of Natural Resources and Environment failed to do its duty when it issued an air permit for a new 830 megawatt coal-fired power plant proposed by Consumers Energy at its Karn/Weadock complex near Bay City.

The air permit, granted by the state Dec. 29, 2009, allows the company to emit 4,480 tons of carbon monoxide, 2,150 tons of sulfur dioxide, 1,790 tons of nitrogen oxides, 860 tons of particulate matter, 572 pounds of lead and 64 pounds of mercury each year as well as other pollutants.

The environmental groups say that this permit is unlawful because state regulators did not require the power company to use the best available pollution control technology.

“We believe the Clean Air Act today requires regulation of CO2 from a major source such as a coal power plant,” said NRDC attorney Shannon Fisk. “There are no controls on carbon at this facility at all. They also failed to require stringent control for sulfur dioxide and mercury. There are controls available for these pollutants.”

The NRDC also argues that state regulators failed to follow state and federal rules that require them to consider whether there are cleaner alternatives for meeting power demand.

“We believe that an objective analysis would show that there are cleaner alternatives that are better for environment and Michigan’s economy,” Fisk said.

Consumers disputes the allegations, of course.

“The groups behind this legal challenge continue to ignore the fact that building this new clean coal plant and retiring old plants will achieve a significant reduction in emissions,“ Consumers Energy spokesman Jeff Holyfield said.

According to Holyfield, “This new plant is going to be amongst the cleanest in the world. It uses state of the art technology, and it is going to be able to meet or exceed all expected environmental regulations.”

The U.S. Environmental Protection Agency is expected to released guidelines for regulating carbon dioxide emissions at facilities such as coal plants by early next year. How can Consumers know it will exceed regulations that have not yet been announced?

Holyfield said that the utility anticipates it will be able to meet future regulations through buying carbon credits or in some other way.

Plus, he said, there will be legal challenges and Congressional efforts to oppose new EPA carbon regulations.

“There is a long parade of people that want to get into court and challenge this.”

Holyfield emphasized that the plant is being planned in a way that would allow it to adapt to changing environmental rules.

“This plant is going to be so efficient it is going to have emissions that are 10-15 percent lower than other units,” he said. “In the design work we are leaving room for carbon capture and sequestration techniques and the geology looks favorable for storing carbon underground.”

Holyfield’s public optimism about the new plant is at odds with what the company is saying to investors behind the scenes.

In communications with investors earlier this month CMS Energy — the parent company of Consumers Energy — acknowledged that anticipated federal environmental regulations mean substantial uncertainties and financial risks for the company.

It also stated that it expected its air permit to be challenged. Before construction can get underway the company also must obtain a “certificate of need” for the project from the Michigan Public Service Commission, and officials have acknowledged that this process could be lengthy and challenging.

In a recent conference call with investors, CMS Energy CEO David Joos emphasized that the company is exploring alternatives to developing the coal plant.

Holyfield said that Consumers is analyzing the lawsuit and is unsure as to whether it is likely to cause delays in the certificate of need process at the MPSC.

The NRDC’s Fisk says that the outlook for the planned coal plant is not good.
　
“Throughout the country companies are realizing that coal is not economically viable,” Fisk said. In the last few years nationwide we have seen 127 proposed coal plants canceled.”

Cost could also be a major hurdle for the project. “CMS originally estimated that this plant would cost under $2 billion,“ Fisk said. “Now CMS filings with MSPC show it will cost about $3.5 billion dollars.”