Cost of plant should not have been reason to deny permit, says Wolverine
by Richard Lamb Advance Editor
The cost of the proposed Wolverine power plant should not have been an issue in the state?s denial of the permit to install, said Ken Bradstreet, director of communications and government affairs for Wolverine. Yet, last month when the state denied Wolverine?s request for the major permit needed to start the 600-megawatt coal-fired power plant, perceived costs to the member-owners became the issue, not ?science and the law? as had been stressed by Michigan Department of Natural Resources and Environment (DNRE) engineers during the permitting process.
The decision to deny, based on the numbers, came into focus through a column in the Advance last week written by Orjiakor N. Isiogu, Chairman of the Michigan Public Service Commission (MPSC). Isiogu said MPSC staff analysis determined that the proposed cost was significantly underestimated, with Wolverine?s consulting engineers estimating $2,484/kW (kilowatt) and the MPSC finding estimated costs could be as high as $3,800/kW.
?I don?t know where he stands on the plant, and I am not impugning his integrity at all, but the cost issue came up through the process off and on. There were a number of issues, but cost is the one they settled on as being politically expedient because it is a pocketbook issue. It is the one people are concerned about,? Bradstreet said. Bradstreet said denying the plant based on the cost issue would be a good one, if the numbers were accurate, even if those in power had other reasons to deny the permit. Wolverine has said all along the MPSC numbers were not as accurate as the figures its consultants Burns and Roe calculated. In fact, Bradstreet said. Wolverine attempted to answer the cost issue before it became a factor in the denial. Wolverine suggested that its cost experts meet with state officials to discuss cost estimates.
?They have some cost experts that they have confidence in and we have cost experts that we are confident in, people who actually build power plants. We suggested that we sit down together with our cost experts and try to figure out what the real answers were. There was no real interest in doing that,? Bradstreet said. He wouldn?t say specifically who received that offer, but characterized it as ?somebody who had enough position to impact the process.? Wolverine also suggested the DNRE grant a permit with a price cap on it, but the state showed no interest in that, according to Bradstreet. ?We invited them to give us a permit that has a hard cap, because we are not going to build it if costs what they say anyway,? Bradstreet said. ?It makes me wonder how genuine their cost concerns really are.? Isiogu cited the public service commissions from other states, which led Wolverine officials to think the MPSC now would be cited in the future, even though the numbers are under dispute. Wolverine insists that not only are their figures correct, this is a great time to build a power plant an
?There is probably not a better time to build a power plant, because labor is desperate for work. Most of these construction companies are sharpening their pencils because they don?t have enough work. For the commission to continue to project increases in costs at a time when costs are not going up, they should take another look at this,? Bradstreet said. No decision has been made in regards to Wolverine appealing the decision of the DNRE. Wolverine has until mid-August to file an appeal. Bradstreet said the DNRE decision last month didn?t really surprise Wolverine management.
?It was evident from the MPSC decision in September that they were going to be very reluctant to give us a permit. We did work with them on a number of fronts trying to convince them, such as the cost cap idea,? Bradstreet said. When the state refused to talk about it, Bradstreet worried ?they didn?t take that suggestion very seriously. It tells me that cost wasn?t really the issue, because if that would have satisfied them, then they would have had to give us a permit,? he said.