A number of municipal utilities in Michigan have expressed interest in becoming part owners of the new plant, however, no formal agreements have been reached with potential participants.

The new plant is expected to cost in excess of $2 billion and Consumers Energy's share of that cost will be in proportion to its ownership interest. The plant is expected to be in operation in 2015.

"Consumers Energy has selected the Karn/Weadock Generating Complex to be the site of a new clean coal power plant to serve the growing electric needs of Michigan families and businesses in the 21st century," said David Joos, the president and chief executive officer of CMS Energy, the parent company of Consumers Energy.

"Customer demand for electricity is growing at a steady pace in Michigan. To help meet that growing demand, Consumers Energy plans to double the amount of electricity from renewable sources that we supply to customers to 10 percent from 5 percent today. We're also working on ways to help customers lower the demand for power through new energy efficiency and demand management programs, which will help lower overall power costs," Joos said.

"Even with increased use of energy efficiency, demand management, and expanding renewable energy resources, our customers and Michigan still will need new power plants. The state of Michigan's 21st Century Energy Plan makes clear the need for 5,000 megawatts of new baseload power plants to meet the growing electric needs of customers in our state between 2015 and 2025."

Using a variety of options to meet the growing customer demand for electricity is captured in the company's Balanced Energy Initiative, a comprehensive 20-year plan developed by Consumers Energy in response to the state's 21st Century Energy Plan.

The new power plant announced today will bring significant economic development benefits to the Bay County area and Michigan. Building the plant is expected to create nearly 1,800 jobs at the peak of construction, then at least 80 ongoing jobs after the plant begins operation. It also will provide a significant boost to the local tax base and area businesses.

The new plant will use proven state-of-the-art technology in all aspects of its operations, including the latest and best available technology to minimize environmental impacts.

Consumers Energy selected an advanced supercritical pulverized coal design that will provide the best overall balance in performance, reliability, lower emissions, and cost.

John Russell, the president and chief operating officer of Consumers Energy, said the Karn/Weadock Generating Complex was selected as the site of the new plant because of a number of factors, including the ability to ship in coal by rail or water, the proximity to customer load, and the size of the 1,000-acre site, which is large enough to add a new plant and still have the potential for a second new unit.

"The Consumers Energy operations at the Karn/Weadock site began nearly 70 years ago. Karn/Weadock and its employees are part of this community, and we're pleased that we're known as a good neighbor as well as being designated a Clean Corporate Citizen by the Michigan Department of Environmental Quality. We're looking forward to continuing our relationships as we work together on this new plant," Russell said.

Joos and Russell noted that selecting a site for the new plant was only a single step in the process of building a new plant and there are several key hurdles that must be cleared before Consumers Energy can move forward with the new clean coal plant.

They identified those as:
+ Repeal or significant reform of the state's electric deregulation law so the state has an energy policy that will allow new power plants to be financed and built + Obtaining environmental permits for the plant + Successful Michigan Public Service Commission regulatory review and approval of Consumers Energy's plan for the new plant + Obtaining property tax abatements for the new plant

"The 21st Century Energy Plan recognizes that legislative and regulatory changes are necessary so the new power plants needed to serve the growing customer demand for electricity in Michigan can be financed and built," Russell said.

In other states, deregulated markets led to significantly higher and more volatile electric prices for customers, Russell said, adding that a number of states have ended their experiments in deregulation to provide for market stability needed to allow investments in power plants to move forward.

"Our customers are using 8 percent more electricity today than they were a decade ago, and the demand continues to grow. We need to invest in new, clean, efficient generation to meet those needs. If we don't, our customers will be exposed to higher, more volatile electricity market prices and lower reliability. In addition, new generation developed in Michigan means needed investment and jobs here rather than in other states," Russell said.

Russell said Consumers Energy plans to file the second part of its Balanced Energy Initiative with the Michigan Public Service Commission on Sept. 21. That filing will outline the company's plans for construction of the new plant and start the regulatory review process for the plant.

This fall, the utility also plans to file an application with the Michigan Department of Environmental Quality for the air emissions permits required for the new plant.

Related Links
Consumers Energy
Powering The World in the 21st Century at Energy-Daily.com

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