Ohio’s Big Lesson for Rogers City

Citizens and officials from across the state who campaigned against American Municipal Power’s proposed coal plant celebrated after the company dropped its plan

The 109^th coal plant proposal to be dropped in the last two year sure was a biggie. American Municipal Power’s proposal for a 960 megawatt power plant in Meigs County, Ohio was officially declared dead by the company on the day before Thanksgiving.

The AMP Ohio plant attracted a lot of attention over the last few years because, while it already had its building permits, company officials kept trying to use smoke and mirrors to make the project’s expense sheet look acceptable. But the company eventually ran into this reality: The plant would just cost way too much and would condemn its 80 municipal buyers to decades of expensive power.

The AMP project hits home in northern Michigan for several reasons. One of the main problems with the Wolverine Power Supply Cooperative’s goofy Rogers City coal plant proposal has been its cost. Financial analyst Tom Sanzillo pegged the cost of power coming out of Rogers City at 17 - 19 cents per kilowatt-hour back in 2007-at least twice what the Wolverine family of electric co-ops is currently paying.

Mr. Sanzillo testified in the AMP Ohio hearings using documentation very similar to what he used to create the Wolverine estimate. Although it didn’t surprise me because I know Tom and his work well-I hired him for the Wolverine report-the respected utility engineering firm R.W. Beck Inc. agreed with his AMP numbers and estimated the cost of power from the Ohio project at 17.27 cents per kilowatt hour.

Beck gave its estimate to AMP in 2008, and then the utility spent more than a year trying to weasel out of its obvious cost problem. With Wolverine, such “denialism” has gone on longer: Wolverine got its Sanzillo estimate in late 2007, never responded to it, and continued to spend member money ($20 million-plus so far) pushing the project while refusing to public discuss its cost, even when repeatedly asked to by some of its members…including me.

So now the Ohio boys have finally admitted defeat; the company will instead plan a combination of natural gas plants, efficiency programs, and record-low open market buys.

Wolverine, of course, could choose exactly the same option, which would bring their members lower-cost power. Today, environmental groups are lining up to help AMP Ohio move away from more coal. They would be glad to work with Wolverine, too, if the company would only listen-not to them, but to the 109 other companies that decided to avoid expensive coal as a power investment for the next five decades.

At least with the AMP project we had a better view of the financials. As a municipal supplier, there was much better access to the numbers. We know, for example, that the cost estimate of the plant went from a staggering $2.5 billion just two years ago to an overwhelming $3.9 billion this fall.

Wolverine, however, still maintains that its proposal’s price tag has not increased from its initial, May 2006 estimate of $1.2 billion. The member-owned company can claim whatever it wants or, as has been their practice since 2006, stay completely mum on what’s going on with its internal numbers.

That is because, unlike municipally owned power companies, Wolverine doesn’t have to open its project’s books to anyone, no matter how many members ask where their money has gone. I suspect Wolverine is hoping that its members will end up feeling obligated to spend whatever it takes to build a coal plant just so they don’t have to admit to themselves that they let their leaders waste all sorts of money trying to push a really bad idea.

Or maybe it’s the simple fact that Wolverine officials are spending their member’s money instead of their own, and have literally nothing to lose in trudging down the coal path with blinders on, ignoring the reasoning behind 109 other power suppliers.

Or maybe-just maybe-Wolverine will see the light before too many more millions are lost: There’s lots of unused natural gas generating capacity available in Michigan, and that could help the utility move forward with money-saving energy efficiency programs with their customers, as well as wind and solar power.

Then, instead of all of this head-butting, we could work together to bring northern Michigan a cleaner, more sustainable energy source for the many decades to come-one that creates many, many more jobs.

Maybe.

Tom Karas leads the Michigan Energy Alternatives Project and founded Co-opConversations.org. Reach him at logman39@hotmail.com.