While Increased Regulations Shut Down Coal Plants, Energy Costs Skyrocket

As Michigan’s coal industry has been decimated in part by increased federal environmental regulations, some experts are concerned energy bills will skyrocket.

Consumers Energy announced it was canceling its plans for a clean coal plant near Bay City. Consumers Energy also announced it didn’t anticipate operating its seven coal-fired plants past January 2015.

At the same time it’s shutting down coal plants, Consumers Energy proposed hiking its electric-rates by $147 million this year. The Michigan Public Service Commission limited the increase to $118 million.

Michigan’s coal-burning power plants supplied 60 percent of the electricity used in the state, according to a Michigan Public Service Commission, Department of Labor and Economic Growth 2008 study.

And USA Today recently reported that electric bills have skyrocketed nationwide in the last five years.

Daniel Simmons, spokesman for the Washington, D.C. non-profit Institute for Energy Research (IER), said their research has Michigan losing significant electrical capacity as a result of Environmental Protection Agency (EPA) regulations. Simmons said if all the plants projected to close in Michigan were operating at full capacity, for one hour they'd produce 1.5 gigawatts of electricity.

“Closing these older coal-fired power plants will further increase the price of electricity as utilities build new power plants and pass on the costs to electricity consumers,” Simmons wrote in an e-mail. “This means higher electricity prices for Michiganders and the higher prices will make it even more difficult for businesses and manufacturers in Michigan.”

Meanwhile, experts predict large offshore wind turbines could be built in the Great Lakes as quickly as three years.

But offshore wind costs $243 per megawatt hour while coal cost range from $94 to $136 per megawatt hour, according to the U.S. Energy Information Administration.

Russ Harding, the environmental analyst for the Mackinac Center for Public Policy, said experts are concerned natural gas prices will also increase. Harding said natural gas will be needed to replace the loss of coal production because wind and solar are not dependable forms of energy.

“It takes huge quantities of natural gas to replace coal electrical generation,” Harding said.

A Sierra Club official applauded Consumer Energy’s decision to shut down coal plants in a letter-to-the-editor.

Laurie Tata, a member of the Michigan Sierra Club Political Committee, wrote that “clean, renewable energy sources are our future.” The Sierra Club files a lawsuit against every coal plant in America seeking a permit.

Consumers Energy Spokesman Jeff Holyfield didn’t reply to an e-mail seeking comment. The Sierra Club’s Michigan Director Anne Woiwode didn’t respond to an e-mail seeking comment.

According to an EPA report, U.S. air quality has greatly improved by significant measures since 1970. According to the IER, "Since 1990, nationwide air quality has improved significantly for the six common air pollutants. These six pollutants are ground-level ozone, particle pollution (PM2.5 and PM10), lead, nitrogen dioxide (NO2), carbon monoxide (CO), and sulfur dioxide (SO2)."