The second part of their message didn’t tie with the first, they said, but has them looking for power from sources other than the proposed power plant in Rogers Township. Wolverine will seek to purchase an interest in the main power-generating plan in the Upper Peninsula. Wolverine’s CEO Eric Baker and Ken Bradstreet, director of community and government affairs gave an update Friday at the Rogers City Area Senior Community Center to a group of invited community leaders. “We are not here to announce the cancellation of the project,” Bradstreet said during the welcome. “But there are some things that happened recently that we need to talk about that change the prospects,” Bradstreet said.

BAKER TOLD the group of about 60 elected officials and business people sobering news that dims the prospects of the power plant being built. The news certainly means the plant will not begin construction this year, as previously hoped. “I would want to be the one in town to deliver the news that we were moving ahead with the project and I think I should be the one to deliver the sobering news,” Baker said. Recent rules handed down from the EPA jeopardize the ability to build the 600-megawatt power plant, planned and permitted for in a portion of the Calcite limestone quarry. Wolverine first announced the project in May, 2006 and after many delays at the state level, obtained its major permit from the Department of Environmental Quality last July. Now the cooperative faces roadblocks at the federal level, which might doom the project and at least 12 other coal-fired power plants on the drawing board in other parts of the country.

Since Baker appeared in Rogers City in October, the Wolverine board of directors had approved a budget to prepare a bid package for all the major equipment including the boiler, the steam turbine generator, the construction, the civil and site work on land and bids on the slip to bring in the coal. All that engineering work was to be done in 2012, Baker said, and things were beginning to be finalized on the planning end. A defense of the air quality permit from environmental groups and a final economic evaluation leading to a decision late this year were also planned.

SOME SIX months ago, the EPA announced it would issue new rules on emissions. “Typically the rules are proposed and the parties evaluate the rules and can make comments on them and then typically the rules come out. What happened in this particular case is different from what normally happens,” Baker explained. Standards for new coal-fired power-generating plants and existing plants were set at different levels. Standards for existing plants were set at far less stringent levels than those set for new plants. Older plants will be allowed to emit more pollutants than start-up ventures. Expensive new equipment will be necessary to make these changes, but the cost of implementing the changes might mean some plants would close. Since coal provides half of the electricity used in the United States, power shortages could occur, Baker said. Electric rates to consumers will most certainly go up, but changes for existing plants are achievable, but will be expensive he explained. Standards for new coal-fired generation plants were made even tighter than those standards set for modifications on existing plants, possibly unreasonably low. “I want to make it clear there is a double standard for new power plants,” Baker said. Emissions would have to be considerably lower on a new power plant, than old ones, which are retrofitted. “There is a lot of concern in the industry that the proposed rules were at levels that were so low, that no new coal plant could ever be built,” Baker said.

INITIALLY, PROSPECTS didn’t look that bad. Wolverine looked at the new standards after the draft came out last summer and felt “fairly confident” that the new standards could be met at the proposed plant. Then came a twist when the 1,000-page EPA ruling came out Dec. 21, 2011. That changed everything for Wolverine.

“In an unprecedented move, when the final rule came out, the level is so low that we are not convinced that we can get any vendor to guarantee an emission rate that would achieve that new proposed level. And because we have not commenced construction in any meaningful way, we are subject to the new rule. What that means is that we are not going to move forward with the engineering. We are not going to move forward with the detailed design and bidding process because I don’t believe that we will get any bonafide bids because the emission rates are virtually unachievable at this point,” Baker said. Critics have said the EPA’s regulations will raise electric rates dramatically and could lead to less reliable sources of power as plants are forced to close. The new regulations are only the latest strikes the Obama administration has made against coal, critics claim. The rules could be challenged in court, amended through legislation or changed by a future administration more in favor of coal plants, but Baker said rules like this are often more difficult to undo than to make in the first place. A presidential administration that has stated opposition to the coal industry is the biggest roadblock. Those new ultrastringent standards have the effect groups opposed to coal plants have sought—that is no new coal plants.

“It may be technically possible to get to (the new standards), but you need a vendor that is willing to say ‘here is my pollution control system and if it doesn’t make that, I, the vendor, will be on the hook to do everything that is necessary to make that level.’ Because if it doesn’t meet that level, we would be in violation of our permit and we can’t run. So you need a vendor to step in and take that risk,” Baker said in answer to a question. “That is the key right now. We don’t believe that there are any vendors who would step in and give us that guarantee right now because the levels are so low. There is no way a utility 10 times the size of Wolverine would take on that risk without a vendor guarantee. So there is no way Wolverine would contemplate taking on that risk.”

Vendors would rather work in places like Korea and China, where there are no regulations to slow projects as faced in the United States. He said those negative factors have altered Wolverine management team’s thinking for the long and short term. “There are some who will say this is the time for Wolverine to wake up and cancel this project. Our position at this point will be we are not going to do that, yet. We want to continue to see if this is an opportunity for the state of Michigan, for Rogers City and for Wolverine because we still need (power) generation. It is very frustrating for us,” Baker told the group. “So this has shifted from an obstruction at the state level to a (an obstruction at the) federal level,” Baker said. The EPA rule has put the entire project into question, he said. “The levels are very, very, very low, many, many times more stringent than an existing coal plant is at and many, many times more than an existing plant can clean itself up to,” Baker said.

Bradstreet said there are only 12 plants around the country in the same boat as Wolverine’s Clean Energy Venture in Rogers Township. “So there is not going to be huge outcry from the utilities because that doesn’t impact that many of them,” Bradstreet said.

WOLVERINE’S SITUATION drew comments from two elected officials at the meeting. “I thought it might be even worse than it has been. I appreciate their integrity. When I read this in the newspapers over the Christmas holiday I thought oh no, this is not good news. On the other hand, once the dust settles maybe some vendors will say, ‘you know what, maybe we can do this.’ I still remain optimistic,” said Rogers City mayor Beach Hall. The mayor said he is impressed with Wolverine’s honesty and willingness to give the city the bad news along with the good. “I am not very happy at all with the federal government. For a long time we were held up at the state level and now, frankly and in my opinion we are being held up by for a political agenda at the national level,” Hall said.

State Representative Peter Pettalia (R-Presque Isle) voiced his concerns with the new ruling which puts Wolverine’s project on hold. “I think it is very disappointing. Ultimately I truly believe it is because of the policy that is coming out of Washington that is anti-coal,” Pettalia said. “What Mr. Baker said is true. We educate people, we build the technology to make clean power plants and then we ship them overseas. If someone was in business and they were frustrated with what they have to do (to meet government regulations) you would leave too. And yet we are trying to attract jobs here and we are sending them away. It is hard to grasp,” Pettalia said.

Meanwhile, the clock is ticking on Wolverine’s 18-month permit from the state, which took so long to achieve. That permit is good until January 2013. Wolverine will keep the Rogers City office open with Bradstreet continuing regular office hours, but will suspend the bid process while monitoring the political developments in Washington, D. C. and in Lansing.