BWL sticking with no-coal future


TUESDAY, Aug. 28 — A new rule proposed by the federal Environmental Protection Agency last week would ease pollution restrictions and squeeze more life out of the nation’s aging fleet of coal-fired power plants, but the rule will have no effect on Lansing, according to BWL General Manager Dick Peffley.

“We don’t plan on making any changes,” Peffley said. “We want to be out of the coal business here in Lansing by 2025. Eckert Station will still close at the end of 2020 and Erickson by 2025. Those plans are set in place.”

The new rule would allow utilities to refurbish or upgrade aging coal-fired plants without having to install costly pollution control equipment, but Peffley said the BWL’s two coal plants are past the point of no return.

“We’ve already scaled back our maintenance and capital improvements in the plants,” he said. “They don’t have 10 years left in them. You don’t want to fill the gas tank and overhaul the engine for a car that’s going to the junkyard.”

The administration’s own analysis predicted that the proposed rule could lead to 1,400 premature deaths by 2030 and up to 15,000 cases of upper respiratory problems.

President Donald Trump said his administration is fighting against a “war on coal” by rolling back emissions goals set under President Barack Obama’s Clean Energy Plan. George Stojic, the BWL’s director of planning and development, said the utility’s decisions have been driven by longer term economic trends.

“New natural gas fired plants are much more efficient than coal fired plants,” Stojic said. “Renewables are much more affordable now.”

James Clift, policy director at the Michigan Environmental Council, said the balance sheet is tipping against coal plants, even with extra life support from Trump’s EPA.

“They’re marginal assets in today’s market,” Clift said.

“The market is moving against coal toward renewables, natural gas, energy efficiency, and will continue to do so, because that’s what’s cheapest for customers.”

Peffley said the BWL is not interested in buying into the regulatory “flavor of the month.” The utility’s portfolio has shifted definitively from coal to gas and renewables, anchored by the REO Town Cogeneration Plant, built in 2013, and a $500 million new gas plant, scheduled to break ground next year.

The BWL is committed to 80 percent reduction in its carbon footprint by 2025.

“We saw the path the Obama administration was going down, and it aligned with the closing of our plants through age, so we picked this path and stuck with it,” Peffley said. “This new change in rules could benefit some utilities around the country, but it’s definitely not going to help us.”

The Rhodium Group, an economic consulting firm, predicted that U.S. utilities will shut down at least 28 percent of the nation’s coal capacity by 2030, even if renewable energy prices stabilize and natural gas prices rise, neither of which has happened yet.

Clift said almost half of the plants in Michigan are either closed or scheduled to be closed in 2023, with another cohort of plants, built later in the 80s or later, facing closures between 2030 and 2040.

“But nobody is going to make a long-term decision about any of those plants based on what this administration is doing,” Clift said. “Things are going to change by then. Markets are going to continue to evolve.”

Coal-averse markets and court challenges are likely to blunt the impact of the proposed rule, but Clift is deeply worried about the bigger picture. While administrations come and go and utilities wrangle with regulators, the planet is pretty much on fire.

“All this is taking time and attention from addressing our real problem out there,” Clift said. “I’m worried about the lack of leadership at the national level.”

Clift said that other nations, especially China, are carefully watching how the United States handles its greenhouse gas emissions.

“Yes, climate change is an international problem, but we’re the second largest emitter on the planet,” Clift said. “So we have a responsibility to try to lead here, and obviously, that’s not happening.”



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