On Friday, Michigan regulators took another step to stall the state’s transition to renewable energy, by giving utility DTE Energy approval to recoup up to $952 million from its customers to build a new gas plant in St. Clair County.
DTE Energy expects to begin construction on the 1.1 GW plant in Spring 2019 and have it operational in Spring 2022, as the first major power plant built by the utility since it commissioned the Fermi Nuclear Plant in 1988.
The Michigan Public Service Commission (MPSC) approved the “certificates of necessity” for the plant over strong public opposition to the plan, including more than 10,000 petitions from customers who opposed the plant. Additionally, assessments by multiple groups have indicated that DTE customers would end up paying more for the gas plant than warranted, with a study by Union of Concerned Scientists showing that customer needs could be met for $340 million less by a combination of clean energy options.
However, none of this swayed MPSC, whose chair described the combination of the gas plant and DTE’s plans to meet the state’s renewable energy mandate as a “great example of an ‘all of the above’ strategy”.
And while all three members of the commission concurred with Chair Sally Talberg’s ruling, Commissioner Rachel Eubanks noted (p. 130) that “DTE Electric did not make a strong showing that it had fairly and thoroughly explored alternative solutions to meet near term electricity demand that could have resulted in less risk for customers.”
Evidence of cheaper, cleaner alternatives
Similarly following a standard of “minimal compliance”, MPSC staff recommended approval for the plant in March, despite repeatedly raising the issue of the utility’s failure to seriously consider alternatives.
This comes at a time when the United States has seen its first year-over-year fall in natural gas consumption for electricity generation in many years, as well as new evidence that clean energy options including renewable energy and storage are not only out-competing new plants, but are beginning to replace existing generation.
However the move may say more about politics in Michigan than it does about national trends. MPSC’s approval of the gas plant comes only days after the same regulatory body gutted the state’s net metering policy, with a similarly flimsy record to support its decision.
Clean energy advocates have suggested that the MPSC – all of whose current members were appointed by Governor Rick Snyder (R) – are responding more to the interests of utility shareholders than the consumers they are supposed to represent.
“While DTE’s nearly $1 billion gas plant may benefit the utility and its corporate parent’s shareholders, it is a costly mistake for Michigan customers,” said Regina Strong, Michigan director of Sierra Club’s Beyond Coal Campaign.
And this may not be the end of the fight. “We will be closely reading the order and discussing all options, including appeal, moving forward,” said Margrethe Kearney, senior attorney with the Environmental Law & Policy Center.
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Wow, the Michigan Public Service Commission is going to be looking really foolish (i.e. stupid) in 5 years or less.
Michigan is at a similar latitude as Germany – there is no excuse for the PSC accepting DTE’s irresponsible fossil fuel centric analysis. DTE decided they would make more money with this unneeded plant.
What’s even more disheartening is that Michigan residents will be missing out on the energy economy of the future unless we take our government back from the corporate elites very soon. By forcing our residents to continue to prop up the antiquated model of generating electricity miles away from the customer, we have fewer opportunities to develop micro-grids which will ultimately be more resilient to power outages from storms, hacker attacks etc. It seems like the utilities are working feverishly to gain as much control as possible before new, high energy density batteries, give their customers new options.
Actually DTE would make more money building wind parks and solar facilities. They make money based on capital expenditures. But this would increase rates at a faster pace than most electric customers can handle, so they are taking a all of the above strategy, building wind, solar, and a 24/7 gas plant that can allow them to work well together in providing Michigan electric customers safe, reliable, electric energy at a reasonable cost. The company has a plan to decommission all their coal facilities and reduce carbon emissions over 80%.
That’s an interesting comment. The language of “safe, reliable electric energy at a reasonable cost” sounds exactly like utility PR. Do you work for DTE Energy, Edison Electric Institute, or another utility interest?
Also, your analysis that wind parks and solar facilities would increase rates is in contrast to a number of independent studies, including the one by Union of Concerned Scientists linked to in this article that estimated that a suite of clean energy options – including efficiency – would save DTE ratepayers more than $300 million.
The utility makes money building wind and solar facilities. The model for a regulated utility is return on investments. DTE was awarded a 10% ROE. DTE is building solar, and is building wind. It is all in their filing. And yes, that language is right from their filing and from their public statements. The PSC is charged with finding the most reasonable solution for Michigan consumers. I understand that there are advocates that, purely out of profit motives want to sell their products. I understand there are advocates like Union of Concerned Scientists who advocate for faster pace to renewables. Neither of these interest groups have the responsibility to make sure the lights stay on. The MPSC does. It really doesn’t have to be a partisan or a special interest debate from either side.
For the record, DTE’s latest RPS compliance filing shows DTE Energy building the minimum amount of wind that they must to comply with the state’s renewable energy mandate. And the amount of solar they have built to date is insignificant compared to the capacity of this gas plant.
Per your point about the MPSC, its motives and its responsibilities, I invite you to investigate the concept of regulatory capture, which could explain why MPSC is not requiring a more stringent examination of other alternatives.
https://en.wikipedia.org/wiki/Regulatory_capture
It is interesting that you accuse advocacy organizations of having an economic motive to sell products. UCS and the other advocacy organizations involved in this are to my knowledge all non-profits, and they don’t sell PV modules or wind turbines.
I will also note that it is a common tactic to accuse someone else to divert attention from yourself, and you still haven’t replied to whether or not you work for DTE Energy, EEI, or another utility-related group.
I am not a spokesman for any utility or agency. My opinions are my own. I am not “accusing” anyone of anything. I think their positions are perfectly reasonable, but they do advocate from a point of view, whether philosophical or for profit motive. I apologize if you took offense. Not trying to divert anything. Are you suggesting that the MPSC has some evil untold motive?
I think we’re making progress here. Now we know you are not an official spokesperson, but you still haven’t said if you are employed by DTE, another utility, or EEI.
Per your accusation, let me remind you of your words “I understand that there are advocates that, purely out of profit motives want to sell their products”.
You can throw about straw men like “evil motives” if you like. But to reiterate: the phenomenon of regulatory capture is a possible explanation of several recent MPSC actions, including the agency not requiring a more stringent examination of alternatives to the gas plant.
I accused no one of anything. I said there are some advocates that argue from a profit motive. Those would be people who build and sell solar. They have a profit motive. I am in favor of profit motive. I am a capitalist in a capitalist society. There are also those who advocate from a philosophical motive, non profits like Sierra Club or UCS would be a case in point. Again, not an accusation, just an opinion that I believe is valid, but different from my philosophical view. If the MPSC colluded with a private company that was in direct opposition to their stated mission, and to the determent of the people they are put in place to serve, I would call that evil. That is not a straw man. In your posts you provide a to a page on a theory of government and business may team up to do things that damage the public they have a mandate to serve. It is a theory that comes from a philosophical point of view.
Where I work is not important. Feel free to assume I work where ever you want. I obviously believe MPSC trys to do its mission, and I am obviously in favor of the position both of major Utilities in Michigan (CMS and DTE). That is my bias. I am a spokesman for no company. I speak for myself, from my philosophical point of view. I am not trying to be aggressive in my posts toward you, and believe you have a right to your opinion, and even have the right to not post any of my responses, and attribute no bad motives to you at all.
Yes the second post is their press release. If you want a spokesman for them, call their communications department. And I would advocate you look at an use all the available material. They are mostly wind in Michigan because wind is currently more economical to build and operate than solar. They expect to increase their use of solar in the coming years. They are planning to build more than the clean air plan requires. I wish you well. This will be my last post. You can have the last word and I appreciate the discussion.
Readers: Note the email address. This is a DTE Energy employee, who is speaking from his “philosophical point of view”, which happens to include directly parroting DTE PR.
Mr. Rice: This conversation would have gone differently if you had been transparent from the beginning about the fact that you work for the utility that you are advocating for. Your economic interest in advocating on behalf of your employer is a factor here.
DETROIT, MI – With new wind and solar projects planned, southeast Michigan’s energy provider is expecting to double its renewable energy capacity over the next four years.
DTE Energy has submitted its 2018 renewable energy plan to the Michigan Public Service Commission, proposing more than 1,000 additional megawatts of wind and solar projects in Michigan. They’re scheduled to be completed by 2022.
If approved, DTE says the new projects would drive investment of more than $1.7 billion in Michigan and double DTE’s renewable energy capacity from roughly 1,000 megawatts to 2,000 megawatts.
That’s enough clean energy to power more than 800,000 homes, according to DTE.
“The plan we have filed takes another significant next step toward our goal of cutting carbon emissions by more than 80 percent by 2050, while continuing to deliver reliable and affordable power for our 2.2 million customers,” DTE CEO Gerry Anderson said in a statement.
That’s a nice industry press release for you to repost. We covered that compliance report, minus the spin. The facts: DTE has released a plan to build exactly the amount of wind and solar (almost exclusively wind) that it is required to under state mandate, so the way this is being presented is a bit rich.
https://pv-magazine-usa.com/2018/04/02/solar-mia-in-dte-energy-renewable-energy-plan/