The Sierra Club on May 24 released the results of a study on energy options for residents of Lansing, Michigan, conducted by MSB Energy Associates and Evans Power Consulting on behalf of the Sierra Club ostensibly revealed that the Lansing Board of Water and Light (LBWL) has missed potential cost savings and positive health impacts by sticking with existing coal-fired capacity.
According to the study, the savings could be realized by including a wider range of options in LBWL's plan for Lansing’s energy future, which is currently being considered by the utility’s Board of Commissioners. Study results were presented during the comment period at the LBWL Board of Commissioners meeting on May 24.
Expert analysis of publicly available information used to create the LBWL’s Citizens Advisory Committee’s plan revealed serious flaws in the process, which could lead to wasteful, costly and unnecessary investments by the utility, said the club. Significant problems with the integrated resource plan (IRP) include:
•The failure to evaluate an earlier retirement date for the Erickson coal-fired power plant;
•The failure to include reasonable energy efficiency and demand response goals, which could reduce the need for new capacity;
•The failure to include all resources in the modeling, leading the model to overpredict the need for capacity by 80 MW-200 MW; and
•The failure to consider a scenario that would minimize environmental and health impacts.
The Sierra Club said a recent poll found that support for renewable energy is strong among Lansing-area voters, with three-quarters of voters voicing preferences for using more renewable energy and energy efficiency over continued reliance on fossil fuels.
Brad van Guilder, Sierra Club Michigan Beyond Coal Campaign's Lansing Organizer, said: “Our study highlights the fact that LBWL has left out many options for a cleaner, more responsible energy future for the Lansing area. It is time to set realistic dates for phasing out both the Eckert and Erickson coal power plants to limit potential costs down the road for LBWL and its customers. Pushing the retirement of the Erickson plant too far into the future would incur more health costs for Lansing residents, increase potential costs to meet environmental standards, and delay community planning for a transition away from coal."
The proposed IRP, released on May 10, said LBWL should replace its aging coal-fired Eckert Power Station with a new energy-producing portfolio that would be substantially cleaner while ensuring reliable and affordable electric power for the region for decades to come. The recommendations were presented by a Citizens’ Advisory Committee (CAC). The nine-member CAC held a series of public meetings across greater Lansing starting last October to examine how to replace Eckert with more modern, efficient and environmentally friendly energy sources that would also protect BWL customers’ need for reliable and affordable power.
“Our recommendations represent the type of balanced approach that is necessary and in the best interests of BWL customers, who expressed strong support for replacing Eckert with cleaner energy sources that also must be reliable and affordable energy sources,” said CAC Co-Chair Steven A. Transeth. “We believe our recommendations achieve this balance.”
Eckert is located along the Grand River just south of downtown Lansing. The plant, until recently, had generated about one-third of the energy in the BWL’s service territory, including to downtown Lansing. The 1950s-era plant is at the end of its operational life, and keeping it open is not an option for various reasons: parts are becoming scarce and very expensive; operating costs are excessive; pending environmental regulations create an uncertain future for coal-fired plants like Eckert; and Eckert is located in a flood zone. Eckert is scheduled to close by Jan. 1, 2020.
The CAC’s approach to meeting the future energy needs of BWL customers includes about one-third of the energy coming from renewable sources and energy efficiency programs by 2020 and 40% by 2030. The first 10 years of the recommendations include:
•85 MW of new wind energy (LBWL has about 20 MW of wind energy today).
•40 MW of new solar energy, to be added to the current plan for a utility scale solar program in Lansing.
•100 MW of new natural gas electric generation, compared to 85 MW from natural gas today. This will require the construction of a new natural gas-fired power plant.
•Reducing electric energy consumption in the region by 10% through the Hometown Energy Savers energy efficiency program.
•Reducing by 70 MW the amount of energy consumed during peak demand times by introducing new technologies like “advanced metering infrastructure” and “demand response programs.”
The LBWL forecasts that the CAC plan will result in more than a 50% reduction in greenhouse gases by 2030 and aims to make the LBWL the cleanest municipal utility in Michigan.
LBWL General Manager Dick Peffley thanked the CAC for its work. “In the public meetings, our surveys, and in our meetings with community leaders and organizations, we heard thoughtful and constructive comments from dozens of people who wanted to weigh in on replacing Eckert,” Peffley said. “I view the CAC’s recommendations as the balanced approach necessary to maximize the BWL’s environmental stewardship while assuring a reliable and affordable energy portfolio for our customers well into the future.”
The CAC recommended a portfolio that includes a progressive renewable energy schedule starting with the addition of an 85 MW wind project in 2018, and 120 MW of solar between 2020 and 2030. The portfolio will also position the LBWL to reduce its emissions profile to a level compliant with the U.S. EPA's CO2-reducing Clean Power Plan under each of the four sensitivity analyses. The renewable energy investments will be made in conjunction with the development of 250 MW of gas turbine generation between 2020 and 2030, as well as an additional 150 MW of gas turbine generation in 2030.
Existing LBWL plants are:
•Eckert Station, 179 MW;
•Erickson Station, 149.3 MW;
•REO Town, 84.4 MW;
•Belle River, 147 MW;
•Beebe Wind Project, 2.8 MW;
•groSolar, 9 MW; and
•Granger Landfill Gas, 8.3 MW.
Because the LBWL is planning to retire Eckert Power Station in 2020, it will no longer have enough generating resources to meet expected energy demands or its capacity requirement. When Eckert is removed from service, the LBWL will be about 120 MW short of its generating capacity.
The main impetus for BWL’s IRP is that when Eckert Station shuts down its remaining three units in 2020, LBWL will not have enough capacity to meet its requirements based on projected electricity demand. In addition to the Eckert Station retirement, BWL expects that both Erickson Station and the Belle River Power Plant could retire during the current planning horizon; however, decisions regarding the retirement of either of these plants have not yet been made. For most of the portfolios modeled in this IRP, BWL is using an expected retirement date of 2030 for both plants. However, one risk discussed by the committee was the early retirement of the Belle River coal plant. The committee requested the LBWL include a portfolio in which Belle River was retired in 2025.
Expected Power Plant Retirement Dates
•Eckert Station (six units), 190.2 MW, Units 1 and 3 in 2016, and Units 4-6 in 2020;
•Erickson Station, 154.8 MW, 2030; and
•Belle River Power Plant, 150 MW, 2030. (This plant is owned by DTE Energy, and LBWL has an ownership stake through the Michigan Public Power Agency for 150 MW.)
LBWL decided to exclude the following alternatives from its modeling considerations due to significant technical involvement, cost and high risk:
•Converting the Eckert Station to natural gas - There is insufficient natural gas infrastructure downtown, Eckert is already over 50 years old, the plant is in the 100-year floodplain, and the units are inefficient by today’s standards, which would result in higher fuel costs.
•Co-firing or converting the Erickson Station to biomass - The region lacks the fuel processing infrastructure for biomass, and there is no local “wood basket” (significant source of wood) in southern Michigan. These factors would make it very challenging to feed the biomass facility, and the expense and environmental trade-offs for trucking the biomass from the Upper Peninsula or other sources would be substantial. There is also some uncertainty surrounding how biomass will ultimately be treated by the EPA under the Clean Power Plan.
•Use of hydrogen fuel cells - Hydrogen fuel cell infrastructure has not advanced or been built out enough in the region to support this option at a level that meets LBWL energy-delivery needs. Also, both the capital and operation/maintenance costs for hydrogen fuel cells are dramatically higher than battery storage.