Granholm facing pressure to stop new coal plants

LANSING, MICHIGAN - Retired second-grade teacher Jean Veselenak drove four hours to tell state regulators what she fears would happen if a new coal-fired power plant is built in her community along Lake Huron in northern Michigan.

She believes the environment would be polluted with more mercury — a toxin that can damage children's nervous systems — and carbon dioxide, the primary global warming gas.

"We're sacrificing our kids for corporate greed because we could do this a different way," the 67-year-old from Rogers City said before attending a packed public hearing at the state Department of Environmental Quality in Lansing.

Wolverine Power Cooperative has proposed building the plant in Rogers City, and the DEQ has preliminarily determined that potential mercury pollution there would pose no meaningful risks. Neither Michigan nor the federal government regulate carbon dioxide emissions from power plants.

"It's the best permit that's ever been submitted in our state," said Craig Borr, executive vice president for the Cadillac-based power supplier.

But pressure is building on Gov. Jennifer Granholm to step in before environmental regulators in her administration issue permits for the state's first big coal plants in decades.

Activists say wind-based power, new energy-efficiency requirements and declining electric demand in a feeble economy eliminate any need to burn more coal to produce electricity.

Power companies say the state is nowhere near having enough wind turbines to meet its electricity needs and must start replacing the country's second-oldest fleet of plants with newer technology.

Local officials also crave jobs that would come with new plants. Rogers City is in rural Presque Isle County, whose 14.4 percent unemployment rate ranks 6th-highest among the state's 83 counties.

"Jobs and projects like this are a rarity in northern Michigan," said state Rep. Joel Sheltrown, D-West Branch, who supports the 600-megawatt plant. "There are some who wish that northern Michigan remain pure, pristine and poor."

The debate over whether the state should OK more coal-fired plants has put the Democratic governor in a bind.

She has made alternative energy a centerpiece in her efforts to boost Michigan's economy and make it less dependent on the shrinking auto industry. An energy law she signed three months ago requires that more electricity come from renewable sources and that utilities sell less energy by helping customers use more efficient light bulbs and appliances.

The law, however, also is based on a 2007 energy plan that estimated at least one new baseload plant capable of running 24 hours a day — likely coal-fired — would be needed no later than 2015.

Critics say the estimate is outdated, especially with Michigan's manufacturing base withering. They worry less will be invested in wind and solar power if billions are spent on coal plants.

Power companies respond that the state will need both traditional and renewable power. They say new coal-fired plants will be better for the environment than existing plants.

"The average plant is 50 years old and it's incredibly dirty," Borr said.

He added that, while renewable energy will provide more power in the future, it will not be able to totally replace existing energy sources such as coal, nuclear power and natural gas anytime soon.

For nearly a year, the Sierra Club and others have urged Granholm to direct the DEQ to regulate carbon emissions from coal-fired plants as a greenhouse gas pollutant. She has not done so, but several factors may bring the issue to a head.

For one thing, more coal plants are being considered in Michigan than any other state, according to the Sierra Club. The DEQ is considering permit applications for four coal plants — three of them major — and Wolverine's 600-megawatt plant is farthest along in the process. Public hearings have wrapped up, meaning a decision could come in a couple months.

Three other coal plants on the drawing board have not been submitted to the state for approval.

Faith Bugel, a senior attorney with the Environmental Law and Policy Center in Chicago, said the Rogers City proposal "is not about one permit for one plant.... This is Michigan's time to decide. Will this state move forward into the 21st century and say that it is demanding better, cleaner options for its citizens?"

The focal point is Granholm, who has not made up her mind but has said she has no interest in approving a "whole slew" of new coal plants.

More than 70 coal-fired plants around the country have been shelved or delayed because of soaring construction costs, uncertainty in the credit market and worries that Congress will regulate carbon emissions through a cap-and-trade system or taxes. Plants also are routinely challenged in courts.

Just last week, Texas-based Dynegy Inc. said it planned to dissolve a development joint venture with New Jersey-based LS Power. That leaves in limbo a proposed 750-megawatt coal plant in Midland, although LS Power plans to push the project forward.

Granholm spokeswoman Liz Boyd neither confirmed nor denied last week's report by the Great Lakes Bulletin News Service — a publication of the Michigan Land Use Institute — that said the governor may be preparing a "major statement" on coal plants.

Granholm has extended the deadline for her Climate Action Council to recommend ways to reduce greenhouse gas emissions in Michigan. The report, originally due on December 31, is now due March 1 because the group needed more time.

"Clearly, we have to be circumspect on how we move forward on meeting our energy needs," Boyd said.