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Lawmakers debate our energy future as Michigan coal plants go offline

Apr 30, 2015

The J.R. Whiting Generating Complex in Erie, MI, is one of seven coal plants that Consumers Energy will close by April 2016.
Credit Consumers Energy / Flickr/user

The fight is on over how to make sure Michigan's electric grid remains reliable.

The state's two largest utilities, Consumers Energy and DTE Energy, will close nine coal-burning electric power plants by next April to comply with regulations on mercury emissions.

The closures are playing a big role in a debate in the Michigan Legislature.

It's about whether to keep Michigan's partially deregulated electricity system, expand it, or get rid of it.

Michigan's not alone in shutting down a lot of coal-burning power plants all at once. The state's part of an interconnected grid called MISO, and dozens of plants in other states in that grid are being shuttered too.

Those plants ensured the grid had a surplus of electricity.

Tim Sparks is with Consumers Energy. He says losing this surplus means a less reliable grid.

"You are getting closer and closer or more probable that you could have periods of the year — particularly in the summer months — when it's really hot when you just don't have enough generation to meet that electric demand," he says.

Sparks says that could increase the risk of rolling blackouts.

There's disagreement, to say the least, about how likely that is. But Sparks says the state needs some new generation to replace the retired plants.

The rub is, neither Consumers Energy nor DTE are making plans to build that new generation.

New generation needed but power companies want re-regulation

Both utilities say first, Michigan has to do something about its partially deregulated system. That system lets up to 10% of customers buy their power on the open market. Some school districts and businesses buy their power this way.

"And when the wholesale market is low, they can access that, and when the wholesale market goes high, they're allowed to run back to us. That all works as long as there's plenty of power in the system," says Gerry Anderson, DTE's chairman and CEO.

Anderson says without the extra power, those 10% of customers could overload the system, if they all come back to DTE and Consumers six months after wholesale rates go up.

Is the blackout risk overblown?

"I think to make it fair for all customers across the state, all energy providers should be selling the same product, and that's electricity backed up by firm capacity." — James Clift, Michigan Environmental Council

But some people think this argument is just a ruse. Rick Coy works on behalf of ABATE, a trade group that advocates for deregulation.

"I think they believe for the Legislature to give them their monopoly, they have to create the perception of a crisis and that's what all this talk is about blackouts and rolling brownouts," says Coy.

James Clift, of the Michigan Environmental Council, agrees that the risk of a blackout is overblown.

"Yeah, we don't see that happening at all."

He says utilities rarely have to dip into their surplus capacity to meet demand.

"It is literally a couple of days a year. In the Detroit Edison (DTE) system it's about 80 hours a year, in Consumers Energy territory it's 56 hours a year," says Clift.

Sharing the burden to maintain the system

But at the same time, Clift thinks the current partially deregulated system isn't working. Those deregulated customers can come and go with only six months notice, chasing the lowest price. Meanwhile, their suppliers don't have to share the burden and cost of ensuring the grid is reliable.

"I think to make it fair for all customers across the state, all energy providers should be selling the same product, and that's electricity backed up by firm capacity," Clift says.

So all of that is the background to the debate in the Legislature right now.

Bills to completely deregulate electricity are competing with bills to restore complete regulation, and bills to require suppliers to have their own generation sources.

What the Legislature is wrestling with is a test for what's coming.

Many more coal-burning power plants will be shut down in the years ahead as the nation takes steps to fight climate change.

*Clarification: Deregulated customers have to provide six months' notice when they want to return to DTE or Consumers. We've added that information above.