The Holland Board of Public Works’ plan to develop a new 70-megawatt coal-fired power plant fails to consider alternative and more cost effective ways of meeting the need for energy, the Michigan Public Service Commission announced yesterday. MPSC also stated the plan relies on “overly optimistic” projections about demand growth.
A February 2009 executive order from Gov. Jennifer Granholm directed the MPSC to help the Department of Natural Resources and Environment evaluate whether there are “feasible and prudent” alternatives to proposed coal plants. The governor ordered the DNRE to deny permits for coal plants where such alternatives exist.
In a report issued July 7, the MPSC said:
[Holland Board of Public Works] HBPW failed to adequately demonstrate the need for the proposed facility as the sole source to meet its projected capacity requirements. Given Michigan’s recent economic recession and uncertainty concerning the time frame for economic recovery, HBPW’s forecasted annual demand growth rate of approximately 2.1% appears overly optimistic. Load growth in the early years is dependent upon some key industrial load additions, which have a significant impact on the overall load forecast. Furthermore, the amount of peak demand reduction potential through energy efficiency and other demand-side strategies assumed within HBPW’s supply plan appears unduly conservative. Under-estimating the potential impact of energy efficiency in future years, coupled with an overly optimistic load forecast results in a projected capacity need which may not fully materialize.
The MPSC wrote that the Holland utility had failed to consider that it could meet its power needs though less costly opinions, including a combined cycle natural gas plant, by purchasing power from other providers or through a combination of energy efficiency and load management and renewable generation resources.
Last year MPSC issued similar cautions about a 600-megawatt petroleum coke and coal plant that Wolverine Power Cooperative wanted to build in Rogers City. In May the DNRE, citing those concerns, denied a permit for the plant.
A Consumers Energy plan for a 830-megawatt coal plant near Bay City was deemed acceptable by the MPSC only if the power company retired other old coal plants. The DNRE approved a permit for the Bay City project late last year but this spring Consumers Energy, citing economic concerns, tabled development of the plant.