March 18 2013 12:00 AM

Permits, bond ratings and a final design are in place as the Lansing Board of Water & Light breaks ground on its $182 million REO Town cogeneration project

Courtesy of Lansing Board of Water & Light

Correction: Because of a reporting error, the original version of this story should have said 180 BWL employees will work at the new facility, not 120.

Wednesday, May 25 — “This is our defining moment!” Lansing Board of Water & Light General Manager J. Peter Lark proclaimed this morning at the groundbreaking ceremony for BWL’s new cogeneration plant in REO Town attended by Gov. Rick Snyder.

Inside a crowded tent at the site of the planned natural-gas powered electricity and steam plant, Lark unveiled the BWL’s vision that is being touted as a major economic and environmental gain for the city and the state. Snyder, Lansing Mayor Virg Bernero and Sandra Zerkle, chairwoman of BWL’s board, joined him.

“This is not your typical public utility,” Lark said. “We are putting down roots in the 21st century. And we’re putting them down in REO Town.”

The $182 million project — the same cost as the former Ottawa Power Station renovation, Lark noted — is projected to cut BWL’s coal use by 139,000 tons a year, its greenhouse gas emissions by 50 percent and add 1,000 jobs.


From left: BWL General Manager Peter Lark, BWL Board of Commissioners Chair Sandra Zerkle, Lansing Mayor Virg Bernero and Gov. Rick Snyder. Andy Balaskovitz/City Pulse

Snyder said the project is a “great illustration” of innovation, efficiency and quality of life improvements. He said because Michigan is “rich with natural gas,” it will cut down on our reliance of importing coal while creating local jobs.

“It’s a win for the entire state of Michigan,” he said. “Here’s an opportunity to create jobs. This is a great project — go for it.”

Lark called the occasion a “watershed moment” in the utility’s 126-year history.

“Today is the rebirth of REO Town,” Bernero said. “In a real way this project represents hope to the city of Lansing.”

BWL spokesman Mark Nixon said the project has been moving along smoothly since the BWL announced it in July. Construction permits were approved by the then state Department of Natural Resources and Environment. Double-A bond ratings are in place and $250 million in bonds sold in two days to finance the project. For the latter: “To our accounting people, it means a great deal,” Nixon said. “We’re allowed to borrow money at a much more attractive rate.”

The final design of the eight-story, 160,000-square-foot natural gas plant finished up Friday, Nixon said.

“There’s lots of arched windows and glass, especially parts facing South Washington. We’re trying to make somewhat of an architectural statement in the community,” he said.

Nixon said construction is scheduled to last into late 2012. “Everything should be operational in early- to mid-2013,” he added.

BWL anticipates 180 employees will work at the new facility and construction will create about 1,000 jobs.

As BWL worked on plans to replace the aging Moores Park steam plant, the local environmental community shot back at BWL’s initial ideas for a new coal-fired plant. The plan is to mothball the Moores Park plant and shut down boilers for good after the REO Town plant begins operations, Nixon said. He said no plans exist yet on what to do with the Moores Park plant, but it’s a “possibility” to retrofit the facility to run on natural gas. By shuttering the Moores Park plant, BWL expects to burn 139,000 fewer tons of coal a year with a natural gas-run facility. The new facility also would emit 50 percent less greenhouse gases than the Moores Park plant.

On Tuesday, Lark and Bernero led a tour of the historic Grand Trunk Western Railroad Depot next door to the cogeneration site.

“This is extremely cleaned up,” Lark pointed out to Bernero.

“You call this cleaned up?” Bernero responded, snarky. Pieces of plywood, dirt and other debris still decorate the floor of the main room.

“We put in a lot of work here,” Lark said back to Bernero.

Bernero looked to the west side of the building. A set of stairs lead up to what used to be a platform. Now it’s just rows of wood beams with no floor.

“That’s what you call a stairway to nowhere, eh?” Bernero thought aloud.

“I wouldn’t know anything about that,” Lark said smiling, referring to a sidewalk project on Waverly Road state Sen. Rick Jones called Bernero’s “sidewalk to nowhere.”

“I want to go up there,” Bernero said, pointing to the station’s second-story steeple. Lark wouldn’t allow it — no flashlights to see around. Outside, Bernero wanted to know what the finished roof will look like.

“As I’ve said a million times, Virg, it will look good,” Lark said.

Nixon said the decision to go with natural gas was based on a “multi-year project with a lot of citizen review. After listening to the public and economy, (BWL) decided a coal-fired plant really wasn’t the best alternative.”

Then Lark came up with the idea of a natural gas-powered cogeneration plant one morning in the shower.

“Yes, that is true,” Nixon said. “Some people sing in the shower, other people dream plans of cogeneration. Peter is more of the visionary variety.”