February 19, 2008
Tom Karas, Michigan Energy Alternatives, 231-590-8164
Frank Zaski, Citizen, Energy Activist, 248-855-5018
FOR IMMEDIATE RELEASE:
‘Coal Rush’ Critics Persuade Power Chief to Rethink State’s Energy Forecast
New report could raise more questions about Michigan’s ‘coal rush’
LANSING—The chairman of the agency that regulates Michigan’s private electric utilities has handed a significant victory to citizens groups pushing for a moratorium on the state’s burgeoning "coal rush."
Responding to experts who say that his agency is using outdated statistics to argue that the state needs at least one new coal-fired power plant, Michigan Public Service Commission Chairman Orjiakor Isiogu has promised to take another look at the numbers.
Speaking at a Lansing economic conference in late January, Mr. Isiogu said that his agency would review and possibly revise its years-old assertion that the demand for power in Michigan will continue to grow—a claim that the agency used to justify its endorsement of building at least one more "base load" coal plant in Michigan by 2015.
The forecast, known as the 21st Century Electric Energy Plan,
was released in January, 2007 and predicted that, even if the state launched an energy efficiency program, demand for electricity in Michigan would continue to rise by about 1.2 percent annually.
But some alternative energy experts and economists dispute that prediction. The critics range from environmentalists strongly opposed to building any more coal plants in Michigan to a senior economic analyst at a pro-business, free-market think tank. Together, their challenges raise more questions about Michigan’s coal rush—the drive by a number of energy companies to build at least seven new coal plants in the state.
"It’s great to see that Commissioner Orjiakor is willing to make a more realistic examination of our state’s actual electrical needs," said Michigan Energy Alternatives Director Tom Karas. "Since the rush to build coal plants in Michigan started, many folks felt there was something fishy about the constant ‘We need new power’ drumbeat that we heard from the utilities."
One of the first experts to publicly question the MPSC’s projections of future energy demand was David Littman, senior economist for the Mackinac Center for Public Policy. The libertarian think tank is based in Midland, where energy companies have received a warm reception from local officials for their proposals to build two coal plants.
Writing for the November 2007 issue of Dbusiness Magazine
, Mr. Littman observed that, while the MPSC cut its previous, 2005 demand prediction by almost half when it updated its forecast last year, the newer number is still too high. He added that, more recently, the Edison Foundation, a Washington-based nonprofit, predicted zero growth in electricity demand in Michigan for at least the next few years. Then Mr. Littman went a step further.
"Michigan has no energy supply problem for the next 10 years," Mr. Littman concluded. "Why? Because Michigan has been mired in a one-state recession for the last three years, with no relief in sight…In fact, considering the many plant closings and losses of employment and population, a realistic assessment would anticipate up to five years of declining
energy demand in Michigan."
Some coal rush opponents are quick to point out that, while they strongly agree with Mr. Littman’s forecast of declining demand due to the state’s economy, it ignores another of their key points about the MPSC report: It greatly underestimates the energy savings that aggressive efficiency and conservation programs could generate in Michigan.
These coal rush opponents point out that, compared to many other states, Michigan’s government has done little to promote energy efficiency. They add that, even if energy demand increased, it would be more responsible economically and environmentally to turn to sustainable sources of electricity, rather than burning more coal, to meet that need.
Some of the agency’s critics say its forecasts are too high because 36 of its "demand working group’s" 42 non-staff members, who forecast energy use, are energy executives.
Frank Zaski, a concerned citizen from Detroit who heard Mr. Orjiakor’s presentation at the Institute of Public Utilities conference, sponsored by Michigan State University on January 25, said he was thrilled that the MPSC will re-examine its numbers.
"I have been closely following Michigan’s energy issues and coal rush," Mr. Zaski said. "The numbers from various accounts of the state’s energy demand just didn’t match up. So we think that the time is right to declare at least a temporary moratorium on new coal plants while the state straightens out its energy demand projections."
In his conference remarks, Chairman Orjiakor indicated that his agency’s new projections will reflect the current state of Michigan’s economy, the rapidly rising construction and fuel costs that coal projects are facing, and the anticipated costs of complying with future regulations of power plant’s carbon emissions, a major contributor to global warming.