Michigan approves $1B DTE natural gas plant in blow to environmentalists

By 2023, DTE Energy plans to retire its 1,429-megawatt St. Clair coal-fired power plant, built in 1953. It’s part of the utility’s plan to slash carbon dioxide emissions in the coming decades. The utility wants to build a natural gas plant nearby to replace some of the lost power. (Bridge photo by Jim Malewitz)

LANSING — Michigan utility regulators unanimously approved DTE Energy’s plans for a nearly $1 billion natural gas power plant in St. Clair County over objections from renewable energy advocates.

The Public Service Commission’s approval came amid ongoing debate about the state’s energy future as coal plants shutter and whether the natural gas plant would best serve DTE’s 2.2 million electric ratepayers in Southeast Michigan and the Thumb.

It is the first new large power plant the commission had approved since the early 1990s, according to a commision spokesman.

Related: Coal is dead. A Michigan town is at center of battle over what’s next.

“We’re really happy with the decision today,” said Trevor Lauer, president and chief operating officer of DTE Electric who added the plant “complements the renewable energy we continue to add” to the energy mix.

DTE calls the plant a key piece of its plan to keep the lights on while weaning itself from high-polluting coal in favor of cleaner, cheaper fuel sources: a combination of natural gas and renewable resources.

But the proposal was fiercely contested by environmental groups over the past year, who expressed their disappointment Friday.

“DTE Energy did not prove the gas plant is in the best interest of Michigan ratepayers,” Liesl Clark, president of the Michigan Energy Innovation Business Council, a trade group representing the state’s advanced energy sector, said Friday.

“The Commission should have ordered DTE Energy to submit a plan that included more renewable energy, like wind and solar, and energy efficiency to bolster Michigan’s advanced energy economy and hedge against volatile natural gas prices.”

The 1,110 megawatt plant will power 850,000 homes when it goes online in 2022, DTE says. It’s planned in East China Township, where the utility’s aging 1,429-megawatt coal-fired power plant will close by 2023.

Related: State forces alternative energy power to come from within Michigan
Related: Wealthy benefit most from Michigan’s energy savings plans, study finds​

Friday’s order called the natural gas-burning plant the most “reasonable and prudent” way to supply power needed for a reliable energy grid. The order said DTE could recoup up to $951.8 million from ratepayers for construction —  less than the $989 million the utility requested.

The proposal drew strong opposition from several environmental groups, a pair of solar energy industry organizations and the Union of Concerned Scientists.

Critics argued natural gas — cleaner than coal, but still a fossil fuel that emits greenhouse gases speeding climate change — should play a smaller role in the utility’s energy mix as renewable energy technology improves and prices fall.

The groups tried to poke holes in DTE’s modeling and convince the commission that the utility didn’t fully consider other options — including a mix high in renewable energy and “demand response,” which involves paying customers to cut their usage at peak hours.

Along with its victory, DTE got a scolding during Friday’s meeting. Each of the commissioners said the utility did not freely share data during the lengthy proceedings and its attacks on opponents in filings lacked civility.

“A Commission proceeding is not the place for name calling and what I would refer to as attempts at legal bullying,” said Commissioner Norman Saari, who added “If it happened in a basketball game, the referee would give them a technical foul for taunting.”

Related: Consumers Energy chief: We’re making changes after natural gas crisis

Responding to the criticism, Lauer told reporters: “It’s something we have to learn from at DTE Energy. It’s not the way we want to be portrayed,” and it “got heated at times during the process.”

The dispute came as DTE and utilities across the country are rapidly shifting away from coal power to cut carbon dioxide emissions and deciding how best to fill the void.

DTE generated 61 percent of its electricity from coal as recently as 2016. But it recently announced plans to slash carbon dioxide emissions by 80 percent from 2005 levels by 2050, with a mix of new natural gas and renewable generation.

The utility plans to retire of 11 of its 17 coal-fire generators within five years, following the blueprint of large utilities cross the country.

The state’s other mammoth utility, Consumers Energy, announced plans this year to slash its carbon dioxide emissions by 80 percent and burn zero coal by 2040.

The Public Service Commission’s vote Friday was its major decision since landmark energy legislation triggered new guidelines for proving power plants meet the public’s interest.

Those guidelines — which DTE did not fully meet— did not apply to the natural gas plant proposal because it was filed before they were finalized, rankling the utility’s opponents.

Even so, Chairman Sally Talberg called the plant the best option for ratepayers, saying “we did not feel comfortable” that models offered by renewable energy advocates were accurate.

 

Coal power dims in Michigan

Coal once dominated Michigan, but now it’s fading fast. Since 2010, Michigan utilities have retired at least 26 coal generators at 15 power plants, while 17 generators at six plants are set to retire by 2025. Three other old coal plants converted to burning natural gas. This map shows that changing energy landscape. Click on the coal plant icons for details.

Source: U.S. Energy Information Agency data, public announcements and media reports.

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Comments

sam melvin
Mon, 04/30/2018 - 7:51am

in 2016 MPSC granted DTE a rate increase for ALL customer (not based on usage) a flat $ 8.00
increase For the building of COAL plant in 4 years,

Anna
Mon, 04/30/2018 - 10:03am

I think the Commissioners were quite right to allow the CCGP to be built to replace coal. While the cost of installed electrovoltaic systems is dropping, the investment needed to upgrade our power grid and develop energy storage systems to allow the solar power they make to be usefully harnessed would triple or quadruple the total cost of renewables.

People are often quoting the experience of Germany, but selectively. Yes, Germany's Energiewiende has allowed them to shut down some coal plants and one nuclear power plant in Germany. They have the CAPACITY to produce almost half their electric power from renewable sources. However, that capacity is realized only about 15% of the time.

The subsidies created by the Energiewiende have also forced a raise in (already high) German taxes and a 25-50% raise in the price of electricity. In manufacturing-intense regions, Germany is using even more coal than before to produce electricity, especially during the winter when the smoke from those coal plants tends to hang around longer. Far from sinking, as DTE's and Michigan's will do when the gas plant is finished, Germany's net greenhouse gas emissions went up because there is too much solar power in their generation portfolio.

Don S
Mon, 04/30/2018 - 11:28am

Coal should be part of Michigan power production.

duane
Mon, 04/30/2018 - 5:24pm

I wonder why, with all of the socially responsible investors/funds in the equity market today, that people like Mr. Malewitz come together and use their funds to buy controlling interest in a utility, such as DTE, to establish that company as a working model how they believe a power utility should operate.

If their belief that natural gas, or coal, or nuclear, etc. type power plants are not sustainable, are not environmentally viable, are not economically viable; why not support those beliefs with their own moneys investing in a utility and modeling it inline with what they want to force on others? If they are correct then they would not only show the financial world how to run a power utility, in addition they would be profitable and be able to leverage that money into buying other companies and apply their beliefs there and so on.

Or put in the everyday vernacular on my street, 'put your money where you mouth is.'

Matt
Tue, 05/01/2018 - 3:28pm

Awesome idea! The biggest problem with today's version of environmentalists is that they only rely on government forcing the action they desire rather than putting their money where their mouths are or letting/enticing consumers to vote with their dollars. Second I really want the/a environmentalist to explained how things work when the wind and sunlight we're all supposed to switch to, isn't there. If you're out there please explain this!! Doesn't seem to work without a huge amount of redundant, expensive back up power running in the background.

duane
Tue, 05/01/2018 - 8:53pm

Matt,

You may be disappointed in the 'environmentalists' for not explaining how what they want will work, but that lack of explanation shows the 'environmentalist' only supply the emotions, they always rely on the government for ideas to try to implement their emotions.
The government regulators just doesn't know why and how [lack of experience] things really work or how to make them work better.