In a loss for clean energy, Michigan OKs a new gas plant

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.