Michigan regulators approved a key air permit Tuesday that could help clear the way for Consumers Energy to build an 830-megawatt coal-fired power plant near Bay City.
The Department of Environmental Quality's move comes after months of debate about whether the new plant is necessary to meet Michigan's future electricity needs. Environmentalists said they were disappointed by the decision, even though it also requires Consumers Energy to retire up to 958 megawatts of coal-fired generating capacity from its oldest plants in the state.
Under the proposal, the new generator would be built in Bay County's Hampton Township, about 90 miles northwest of Detroit. The utility hopes to have the $2 billion project online by 2017. It says the project could create up to 1,800 construction jobs and 100 permanent jobs.
"The issuance of the air permit for our new clean coal plant is good news for Michigan," John Russell, Consumers Energy's president and chief operating officer, said in a statement. "This permit moves our project a step closer to creating badly needed jobs and boosting the state's economy."
Consumers, which applied for the air permit more than two years ago, expects to apply next year for a certificate of necessity with the Michigan Public Service Commission.
Staff members at the commission had questioned the need for new coal plants just a few months ago, particularly at a time of growing emphasis on cleaner fuels. The company says the new plant will use technology that allows for cleaner burning of coal than in the units it will replace.
Regulators said that was a key factor in the decision to grant the air permit.
"You are taking away older, dirtier units and replacing them with state-of-the-art technology," said Robert McCann, a spokesman for the Michigan Department of Environmental Quality.
Utilities also argue that Michigan customers could get stuck with higher bills if state-based utilities were forced to buy more power on the wholesale market because their aging coal-fired power plants could not generate enough electricity on their own.
The average Consumers coal-fired power generator is about 50 years old, one of the oldest lineups in the nation, according to state regulators.
But environmentalists say Democratic Gov. Jennifer Granholm's administration missed an opportunity to prevent the expansion of coal-fired power plants and push the state toward cleaner energy alternatives.
"It's a very poor decision and we're extremely disappointed," said Anne Woiwode of the Sierra Club.
Woiwode said Consumers would have phased out some of its old power-generating equipment regardless of whether it was allowed to build a new plant.
Other proposals for permits related to coal-fired power plants in Michigan are still pending. Among them is an air permit for a 600-megawatt plant near Rogers City proposed by Wolverine Power Cooperative.
Consumers Energy is the principal subsidiary of CMS Energy Corp. The company provides natural gas and electricity to nearly 6.5 million of the state's roughly 10 million residents.