Clean Energy In the News

First, the good news: Consumers Energy says electricity bills will fall

5 percent next month thanks to the sale of the Palisades Nuclear Power Plant.

Now, the bad: Eventually, electricity rates will rise again -- but less than the rate of inflation through 2011 -- if the utility succeeds in repealing a state law that offers the choice of picking power suppliers, a top officials at the Jackson-based utility says.

Consumers President and Chief Operating Officer John G. Russell said the power provider needs the assurance of a stable customer base to attract investors to build a $2 billion, 750-megawatt coal-fired plant using the latest clean air technology to meet the state's growing energy needs.

The Karn-Weadock plant site in Hampton Township ranks among four finalists. Consumers expects to make a final decision on the location for a new plant this summer, company officials said.

Earlier this month, two private energy companies announced a joint plan to build a 750-megawatt coal-fired power plant in Midland. The $1.3 billion investment could start generating electricity by 2013.

The utility hopes the state House will introduce legislation this fall to repeal the law that allows competition in Michigan.

"What we're looking for is a little certainty," he said in an interview Friday at The Saginaw News. "Reform is required; repeal would certainly take care of it."

About 200 of Consumer's 1.8 million customers buy power on the open market, and most are commercial, not large industrial, accounts, he said.

Rates would remain competitive in the Midwest market, he said, if the state repealed the 2000 law that allows competitors to build power plants and sell electricity on the open market in Michigan.

The Palisades sale freed $255 million for refunds to customers over the next 19 months, Russell said.

As part of an energy growth measure, the utility pledges to promote energy efficiency and double its use of renewable energy sources, mostly though wind power, by 2015. Alternative energy sources, such as hydroelectricity and landfill methane gas, provide 5 percent of the utility's power generation today.

Russell said the utility has worked closely with Thomas Township-based Hemlock Semiconductor Corp., the largest single site user of electricity in Michigan, to try to strike a deal for a "bundled" electric rate. HSC, which recently announced a $1.2 billion expansion in Saginaw County, pays different rates at its existing Geddes Road facility and additions to the plant. Semiconductor is the world's largest producer of polycrystalline silicon, a raw material needed to produce solar panels and electronics.

Kim Pargoff, an energy advocate with the Ann Arbor-based Environment Michigan, said her group hasn't taken a stand on the expansion plan, but the group would have to see a commitment to renewable energy from Consumers to endorse it.

In an April report, the Ann Arbor-based Public Interest Research Group in Michigan found the 2000 reform that allows consumers to choose an energy provider has cost customers hundreds of millions of dollars more from the same providers without adding choice. v

Barrie Barber covers politics and government for The Saginaw News. You may reach him at 776-9725.