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Response from Wolverine and Cherryland Co-ops to Permit Denial from State of Michigan
How your cooperatives really feel about your future

In an article in the Presque Isle Advance newspaper 6/2/2010 (printed in Rogers City, the site of the proposed coal plant) legislative affairs director for Wolverine Ken Bradstreet, gave hints as to his employers position on the permit denial.

Regardless of whether a new plant is built or not, Bradstreet said energy prices will increase. Wolverine estimated a cost of $2,500 Kw and the governor estimated $3,800 Kw. "The governor needed the $3,800 number in order to project a scary scenario. It is not a believable number," Bradstreet said.

This statement reflects Wolverine's inability to confront the truth in public as to costs for this plant, and also restates their own scare tactics.  Over the last few years, of the 150 new coal plant proposals that erupted in this country nearly 130 have been withdrawn mainly for economic reasons.  This has given the unique opportunity for this country to see over a hundred cost studies about new coal plants.  Mr. Bradstreet would not be able to point to any new plant that was projected to come in for the $2,400 that they estimate, and the $3,800 Kw figure the State used would be somewhat conservative.

During the last three years of this charade, what has not been believeable is that Wolveirne contended they could produce cheap power from a coal plant when time and again; similar plans were shot down due to cost.  How could a company who has never built a generation plant this size ever think they could do it at a cost that was apparently unreachable by some of the largest players in the utility industry?  If they really thought they could, they would have come forward long ago with an updated estimate of the plant and a guaranteed maximum cost to rate payers.  They would have been much more credible if they stated up front that they would not exceed a stated cost per kilowatt hour, but they didn't, they couldn't, that cost would have been the scary figure in this whole story.  Wolverine spent millions of member dollars with full knowledge that they had an open wallet, and little resistence from co-op boards to this project.

The cost of power may well increase, but can Wolverine name anything that won't?  The estimated cost of new coal plants makes some renewable options look like a bargain.  And Energy Efficiency measures still have the best return on investment and will put real Michigan residents to work.

Bradstreet goes on to display an arrogance reflective of his employer when he states:

It is ironic that an air quality permit was denied for reasons that have nothing to do with air quality," Bradstreet said. "Certainly the DNRE has no expertise in power plant costs. I would argue that it is not the strong suit of the MPSC either.

In Michigan we are lucky to have the Michigan Environmental Protection Act, MEPA.  As an ex legislator you would think Bradstreet would know and understand MEPA.  It plainly states that where there is a cheaper, and less polluting option for a proposal, the option that has less negative effect should be used.

Again, the facts are in from all over the country.  New coal plants are an expensive option and their effect on the environment from mercury to carbon dioxide are unquestionable.  MEPA has protected Michigan residents for many years from both the environmental and economic effects of bad ideas; the basis for this act has clearly proven valuable again.

Then it was Cherryland Electric Cooperative's Tony Anderson's turn to chime in with inuendo and his own scare tactics in a Forum piece printed in the Traverse City Record Eagle on June 4, 2010.  In this opinion piece Anderson makes the following remarks:

1. Reliability and affordability are dependent on balancing a diverse energy portfolio.
2. The cost of green energy is almost three times the cost of coal-powered energy. Green may be clean but it not as reliable and not as cheap.
3. If Cherryland were suddenly to stop using coal and go with 100 percent green energy, our members would have power about a quarter of the time they wanted it.
4. The people opposing the coal plant want you to think that coal is not part of the energy solution. They don't want to believe that new coal technology is here.
5. In the last 20 years, our rates haven't gone up 20 percent, let alone 300 percent.
6. They know that as a not-for-profit electric cooperative, we wouldn't allow rates to triple because any profit we make ends up back in the hands of the membership.

Well, let's take a look at these points and show how Cherryland and their handlers at Wolverine are able to skirt the facts and use the old smoke and mirror trick.

1. The problem here is if the Rogers City coal plant were built the distribution co-ops that own Wolverine would be beholden to that plant for over 80% of their generation portfolio.  Does anyone see 80% as diverse?
2. This is an overused technique by the utility industry by comparing the cost of old, existing plants to the cost of new generation.  It is a cheap shot and plays on a public's inability to get the facts.  The State said the Wolverine plant would be at 20.7 cents pkwh, another financial analysis came in at 18 cents pkwh, so let's call it an even 20 cents.  Old coal is about 8 cents, so why does not Wolverine own up to the fact that they will at least double the rates from old coal?  Traverse City Light and Power just gave us an updated cost of 10.5 cents pkwh for wind power, so if you triple that to account for capacity it is 31.5 which clearly is not 60 cents as Anderson would want the public to believe.  Who is trying to scare who?
3. Who on Earth ever suggested Cherryland go 100% green?  This is another scare tactic that is even below the usual co-op standards.  If the co-op bosses ever pulled their heads out of the sand they would see a myriad of options that truly can create a balanced portfolio that is cheaper and cleaner than new coal.  Golly, how come co-opmembers have not heard much about the new natural gas plant that Wolverine purchased this year?  Is it because they don't want members to know that there is a cheaper and cleaner option already owned?  Members ought to ask about the 340MW gas plant that they now own but were never told about.
4. New coal technology.  Mr. Anderson please show us where this new technology has progressed past the theory stage.  The best estimates for 'carbon capture' are that it is 20 years away and the parasitic load for it would be over 30%.  That means that 30% of the plants output would be required to run the 'new technology'.  Can nayone make financial sense out of a theory like that which is at best two decades away?  Is this the rational that should be used when committing member funds for the next 40 years?  It's like saying that half way through the life of this plant the new technology they were talking about might be available!
5. Mr. Anderson is right here, rates have not gone up dramatically in the last 20 years.  On its own, that is a correct statement, but illustrates yet another attempt to employ the smoke and mirror trick.  The truth is that in the last 20 years Cherryland has not been involved in trying to build a huge new generation complex.  So why would Tony try and compare past operational history with the future that has a huge new component to be factored in?  It's not right, and co-op members deserve to have this business explained with the correct rational.
6. This is just plain goofy.  Again, to shade the truth Anderson trys to mislead the co-op members he is supposed to serve.  If the new plant will triple costs, it will triple costs.  There will be no excess profits to give back.  They will not raise rates just to create a false profit just to turn around and give it back.  The plant will make your rates rise dramatically, the members will cover the cost, and there will be no excess profit.  Profits won't raise rates, a new expensive coal plant will.

Please read these two examples in their entirety so that you can make your own judgement about how the co-ops are trying to spin this dirty situation.  The Advance article is here. And the June 4 Record Eagle Forum opinion by Anderson is here. By the way, Anderson was most probably trying to reply to this May 27 Forum.

The bottom line here is when the facts are really used, when current case studies enter the equation, when alternative plans are really considered, there is no good case to be made for spending other peoples money on a risky new coal plant.  Wolverine and the other distribution co-ops should pull the plug on the Rogers City proposal, quit throwing good member money at a bad idea and just join the rest of America and move beyond new coal plants as the only solution to our generation needs.

Members own their co-op.  Members need to take more responsibility for what is being done in their name.  Come to the Cherryland Annual Meeting on June 16 at Wuerful Park.  Vote for new leadership on the Cherryland Board of Directors.  Don't let your money be used for someone else's risky business again.

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