| May 18, 2009
For immediate release
Wolverine CEO Pledges Financial Facts to Members
Speaking to the Economic Club of Traverse City last Friday, May 15, Eric Baker, CEO of Wolverine Power Cooperative, promised to fully disclose the cost of the new coal plant his company is proposing to build in Rogers City, Mich.
According to Baker, however, that disclosure will come only if the state permitting process ends favorably for Wolverine, and when a final cost analysis is then completed.
“That’s a good question,” is how Baker started to answer Len Franseen, a Great Lakes Energy Cooperative member. “Once the permits are complete and the final financial analysis is complete, we will share that with our members before making the final decision to move forward.”
Baker may have been trying to head off the impact of a resolution being introduced at the Cherryland Electric Cooperative annual meeting, scheduled for Wuerfel Park in Traverse City at 4 p.m. on June 10th.
The local utility reform group, Co-opConversations.org, has already promised to try to bring a members’ resolution to a floor vote that would request what Baker promised on Friday. The motion, Resolution 1-A, formally asks the Cherryland Board of Directors to provide the real costs of the proposed coal plant to the general membership before final decisions on the plant are made.
Co-Op Conversations.org, applauded Mr. Baker’s promise of eventual cost transparency, but said the members’ resolution should still be voted on next month. The organization’s Tom Karas said that introducing, discussing, and voting on Resolution 1-A would be a good thing to do. He said it would tell the board that its membership wants to be well-informed on major changes the company is contemplating, such as entering the coal-powered generating business, well before they occur.
“Mr. Baker finally assured co-op members that they will have an opportunity to fully understand the financial effects of the proposed plant,” said Karas. “Eric’s pledge is a testament to the co-op philosophy of a member-owned organization, and I think he is sincere in his desire to have a fully informed membership.”
Financial information about the proposed plant has been hard to come by. First announced as $1.2 billion three years ago, when it was unveiled, the cost of the plant has—like the dozens of other similar, newly proposed facilities around the country—have faced sharp, mostly upward price fluctuations. But Wolverine has never publicly updated its estimate of the cost of its proposal since it was first unveiled, in May of 2006.
The proposed plant’s economic benefit analysis for the Rogers City area did not include the impact of the expected higher cost of electricity, which may eliminate much of the local tax benefit. The company also has not explained where the profits would go from excess energy the plant would provide.
Also in question is, who is responsible for covering the nearly $20 million of Cherryland member funds that have been spent on promoting the plant so far, if it is finally deemed not feasible.
Franseen attend a board meeting of Great Lakes Energy last year and expressed his concern about the cost of a new coal plant.
Similar concerns are having their effects around the country. Over the past few years over two-thirds of 150 new U.S. coal plant proposals have failed. How and why Wolverine continues to believe it can have a different outcome remains to be seen.
But what the Wolverine CEO did was to at least guarantee that the general membership will have transparency about the financial impact of a new coal plant, and that members like Len Franseen will be fully informed.
“Co-opConversations.org appreciates Wolverine aligning itself with one of our basic goals, that of full financial transparency. It is a step in the right direction, but we will wait to see the quality of the information before we stop looking into the fine details of this proposal,” cautioned Karas.
Further background on this press release maybe found at www.Co-opConversations.org or by calling 231-922-1941.
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