May 18 2016 01:07 PM

Environmental groups say BWL’s plan creates uuneeded natural gas plants

What a difference eight years make.

In 2008, the Lansing Board of Water & Light announced plans for a new 350-megawatt coal/biomass plant to replace aging units at its Eckert plant near Moores Park. After fierce public opposition, the BWL shifted gears to replace part of Eckert’s total output with the 85-megawatt REO Town plant that runs on cleaner-burning natural gas.

Today, as the remaining Eckert units and the rest of the BWL’s coal fleet become increasingly obsolete due to age and environmental regulations, the utility is working on a long-term plan to make up for what would be an 80 percent loss of its current load, or more than 400 megawatts.

Last week, a citizens advisory group issued a recommendation, known as an Integrated Resource Plan, to the BWL board to do just that. Instead of calling for a new coal plant, though, the outlook calls for two natural gas plants and more wind and solar generation. By 2025, the BWL plans to get one-third of its energy needs by renewable energy and efficiency, a target that makes it a leader among Michigan utilities.

But with shades of 2008, the plan — which is endorsed by BWL leadership — is viewed by some as a bad investment in fossil fuel with threats to public health and public pocketbooks.

The Sierra Club, which has pushed for years to close Eckert, says the new 20-year outlook is based on flawed, in-house analysis, rooted in 20th-century utility planning.

While the Sierra Club supports the BWL’s plans to add 125 megawatts of wind and solar within the next 10 years, the Sierra Club and others claim the board is not investing enough in energy efficiency to decrease energy demand and, therefore, the need for as much natural gas.

BWL officials say some level of new gas plants will be necessary for base-load generation, or that which can be turned on when wind and solar is unavailable. Energy storage, which could solve those fundamental challenges with renewables, is too expensive at this point, officials said. Additionally, BWL officials say increasing the amount of energy efficiency that’s done will lead to higher electric rates. All told, utility officials say this 20-year energy transition will cost $1.69 billion.

“The way they’re looking at this technology is 20 to 30 years old. One of the frustrating things about this whole process is that it just seems to be not up to date with the best available technology,” said Brad van Guilder, an organizing representative with the Sierra Club’s Beyond Coal campaign. The Sierra Club also announced an intention to sue the BWL last year over self-reported violations of the federal Clean Air Act.

A local expert on energy efficiency agreed with the Sierra Club and that without more consideration, the BWL may end up with stranded capital projects.

“I’m surprised and disappointed that the draft IRP has such a limited incorporation of energy efficiency,” said Martin Kushler, a senior fellow with the American Council for an Energy-Efficient Economy. “The IRP would needlessly increase total costs for BWL customers. But I’m hopeful that with some further analysis and deliberation, this problem can be fixed.

“If they improve their plan to substantially increase the energy efficiency component, the Lansing BWL has an opportunity to truly emerge as a leader in 21st century utility resource planning.”

Indeed, the growing threat of climate change, a federal administration that takes it seriously, the precipitous fall of the coal industry and the steady decline in renewable energy prices means the energy sector looks much different than it did in 2008.

“New natural gas plants … will be a necessary, integral part of the energy supply here in the United States for some time to come,” said George Stojic, the BWL’s executive director of planning and development. “You have to do that with a unit that is dispatchable (like natural gas). I don’t think it would be responsible to replace existing generation without at least some gas.”

To get an idea of the scale of new solar, the BWL is planning a 20-megawatt, 70,000-panel solar project in Delta Township to come online this fall. The latest recommendation calls for twice as much of that capacity within the next decade. The BWL also contracts for about 20 megawatts of wind power today, which is generated from a 34-turbine, 81-megawatt project in Ithaca. The plan calls for a total of 85 megawatts.

Stojic added that the BWL will stick to a 1 percent target for energy efficiency on an annual basis. The report says that, beyond that, less demand or energy sales will make rates go up.

“Rates are very sensitive to sales,” Stojic said. “If you’re saving energy, your rates will go up and that hits low-income customers the most.”

But opponents say the plan doesn’t need to rely on 100 megawatts of new natural gas if more efficiency is pursued. Van Guilder sale bringing another gas plant the size of the REO Town facility “could be avoided entirely” by doing targeted efficiency spending and by pricing structures that reduce demand for energy during peak times, such as hot summer days.

“I really feel the information that was given to members of the Citizens’ Advisory Committee was heavily biased toward building traditional, base-load power,” van Guilder said.

Van Guilder said the process has unfolded in a “very, very similar way” to what happened in 2008. “Basically, the staff made the decision and has a panel that sort of acts as a fig leaf over who’s pulling the strings behind the scenes,” van Guilder said.

Stojic said the months of planning and input from the nine-member Citizens’ Advisory Committee is proof that the utility learned its lesson from 2008. Additionally, the plan will be revisited by the utility in four or five year increments. In 2008, the utility put together a plan then sought input from the community.

“I have a standing invitation to meet with groups if they want to talk about energy efficiency or our energy plan,” Stojic said. “We started it that way to make it much more public and much more transparent than the last time around.”

Subscribe to Our Newsletter