We need to be fiscally and environmentally responsible.
Energy is changing: let's look forward!
The Economics of the Proposal are Questionable
What are the projected costs, for the next 5 years for Natural Gas?
It is very difficult to predict future gas prices as they are often affected by international events and by weather. However, a rough estimate for future prices, by the US Energy Information Agency (EIA), a bureau within the US Department of Energy, projects an increase from $2.11 per 1,000 cubic feet in 2020 to $3.13 per thousand cubic feet in 2022, as the “Henry Hub” spot price, traded on the NY Mercantile Exchange. Other estimates of prices are pure speculation. (The Henry Hub in Louisiana is the major market indicator for the USA).
Has the cost of renewable energy from wind, and solar dropped in recent years? If so, how much?
The Economist Magazine, in its November 28, 2020 issue noted that Solar Energy dropped in price by 82% between 2014 and 2019. Wind energy prices vary depending on if the wind is produced offshore, or on land, but generally is declining rapidly. Incidentally, the cost of energy storage systems in the 2014-2019 period dropped 87% (also, according to The Economist)
What are the projected prices for energy from the Grid, through our provider, the MPPA, for the next few years?
We do not yet have an answer to this question. We are hoping to provide one.
The BLP wants to issue $45 million in bonds -- really? That's a huge amount! How much interest will we ratepayers have to pay on top the $45 million?
A preliminary debt service schedule prepared by the BLP’s financial advisor shows that, if they would be able to secure an interest rate on their bonds of 2%, interest would amount to $10,041,046. Or about 22% of the $45 million borrowed.
The BLP says they would like to sell $45,000,000 in bonds to cover the costs of their proposed project. What is that money for?
The BLP’s most recent publicly disclosed project cost estimate is from February 23, 2021. After the March 2020 Notice of Intent to Issue Bonds, the BLP could be reimbursed for certain costs from the bond proceeds. Items in this category are:
The Sims Plant demolition
Electric Substation Improvements
Advanced (“Smart”) Metering
Items proposed for bond funding on which work has not started:
12.5 MW Plant
Site Infrastructure and Preparation
Costs in excess of the $45 million bond issue will be paid from BLP net revenues.
Note: These costs do not factor in the significant changes in the costs of building materials and labor in the last 6 months.
Renewable Energy, Energy Supply and the BLP
The BLP claims to have a robust renewable energy portfolio. Is that claim true?
The BLP currently has an expensive contract to purchase power produced by methane gas from landfill waste (a technology popular several decades ago). It also purchases power from the grid, an increasing amount of which is from renewable energy. They recently announced plans to purchase a small amount of energy from two solar farms, and they are working hard to expand their supply from additional sources. This is good news!
What are the GH BLP’s plans for purchasing more renewable energy in the coming years? Where will it come from?
At the May 20, 2021 BLP meeting, General Manager Dave Walters reported that the BLP has plans for significant increases in electricity supply from renewable and landfill sources. The plan is, by 2024, to have 28.8% of our electricity from renewable sources: 13.1% from solar, 7.9% from wind, and 7.8% from landfill gas, a total of 28.8%. While the BLP is to be commended for this increase in electricity from renewable sources, there is a contrast with Traverse City Light and Power’s goal of having 40% of its needs from renewables by 2025.
Is it even technologically possible for Grand Haven to have 100% clean energy?
Not in the next 5-10 years. Maybe longer. However, with the amazing reductions in the cost of renewable energy, and the dramatic increases in technology, coupled with the reductions in prices for storage systems (big batteries), it is likely that power produced by renewables and power purchased from the grid (high % of renewables) would make our community substantially a “clean energy community” in a decade.
What is the future of battery scale energy storage? Is that appropriate for Grand Haven now? If not, how long will it be?
This question deserves a long answer.
Battery storage currently provides less than 1% of America's electricity needs and so far draws power principally from solar generators. Currently, most energy storage systems are made up either of lithium-ion batteries or in some cases by “water batteries” (such as the 2,200 MW Pumped Storage Facility near Ludington). Though there are issues with lithium-ion batteries, they have been rapidly improving (Tesla has been at the forefront).
Billions of dollars are also being invested in Hydrogen Battery technology, but cost-effective, utility-scale, hydrogen battery systems may be 8-10 years away.
The combination of batteries and renewable energy is threatening to upend billions of dollars in natural-gas investments, raising concerns about whether power plants built in the past 10 years or proposed for the future, financed with the expectation that they would run for decades will become "stranded assets:" facilities that retire before they pay for themselves.
In Michigan, what is the percentage of energy that electric utilities are required to provide from renewable sources?
Michigan electrical energy producers are to have obtained 15% of their energy from renewable sources this year (2021). Our large public utilities such as Consumer’s Energy have surpassed that goal. Public Act 295 of 2008 establishes a goal of not less than 35% of the state's electric needs shall be met through a combination of energy waste reduction and renewable energy by 2025.
The picture of the BLP plan shows solar panels. Are those in the BLP proposal, or are they examples of what could occur later?
The current project does not include a solar project. Apparently, the solar panels are an artist’s rendering of “what could be.” The same is true for the pictured energy storage system and the park-like surroundings. The current proposal does not include an energy storage component.
Are there communities that have made a 100% clean energy transition?
There are a few towns in the USA: the small town of Rock Port, Missouri is 100% Renewable. Kodiak Island, Alaska (population 15,000) was 99.7% renewable in 2015 (lowering their rates to their 2001 level). The city of Seattle’s public utility has been offsetting its emissions since 2005, and has been carbon neutral every year since 2005. Iceland, and Costa Rica are examples of countries that are 100% Renewable. Even Saudi Arabia is moving to add more renewable energy!
Have the country’s largest utilities been at the forefront and active in supporting the renewable energy transition?
Until recently, no. Many of the largest utilities in the U.S. have funded climate change denial campaigns and have worked to short circuit the renewable energy transition. In recent years, however, many big companies have changed direction. They now see the advantages. Consumers Energy in Michigan, for example, plans to have 42% of their capacity from Renewables by 2030! 56% by 2040!!! An interesting case study is the joint-venture project of Pacific Gas and Electric, which with Tesla, announced a 750 MW combined solar and battery project in California, last summer.
Since Sims stopped producing, where has the BLP purchased our electricity?
Since February of 2020, 100% of BLP customer’s energy needs have been purchased through the Michigan Public Power Agency (MPPA) over the grid.
What are the projections for the electrical energy needs for Michigan in the coming years?
We are trying to find an answer to this question.
How is the supply of energy for Michigan going to be provided in the near future?
Utilities…large and small are significantly increasing their energy supply from renewable sources. For example, Consumers Energy is working on the development of a 250 MW Solar “Farm” a few short miles from Grand Haven in Eastern Muskegon County.
In the coming years, as Michigan coal plants cease operation, producers will be adding new generation, the transmission of which, over the grid, will be managed by the Midcontinent Independent System Operator (MISO).
Harbor Island and the Environment
BLP said publicly they had resolved their differences with the EPA and EGLE, but the Tribune reported that was not true, there were still differences. What exactly are the differences?
Recent negotiations occurred in a closed-door meeting. Details have not been released, but BLP has indicated it will no longer argue with or engage in a costly legal battle with the regulators. The only public announcement has been that the cost has increased to $17.8 million from a budgeted $8 million. As of this writing, we understand that negotiations are still ongoing between BLP, the EPA and EGLE, so the differences have still not been finalized. We do not know how the 17.8 million dollar figure was determined.
If the BLP does not get their bond proposal approved, how will they pay for the environmental cleanup? Will rate payers have to pay?
This is unclear. Funding would likely need to be from a combination of funds from federal, state, city, and private, private funding sources. The Grand River and the Grand Haven State park are assets for all the people of Michigan. Yes, the BLP will be responsible for some of the clean-up…a significant amount, but the island has had environmental challenges for decades before the first SIMS facility was built there. The BLP is not responsible for the environmental clean-up of the whole island.
Is the total cost of the clean-up of Harbor Island included in the proposed $45 million bond issue?
$8 million of clean-up costs are included but the total clean-up costs are unknown.
Recently the cost estimate increased from $8 million to $17.8 million!!! Nobody really knows what the costs are.
Who owns Harbor Island? If the BLP does not build on Harbor Island, what will happen to the property?
Harbor Island is owned by the City of Grand Haven. The city has authorized the BLP to use a portion of it for electric utility purposes. If the BLP does not build the proposed power plant and the technology/operations center, it can retain control of the renovated substation, the power lines as well as the areas they have occupied, formerly. It can perform whatever environmental monitoring is ultimately required. If parts can be re-used for parks and recreation, the BLP can work with the city on the details.
With a portion of the Island provided to the BLP for power generation purposes, eventually, the environmental problems on the island will need to be addressed, regardless of whether a new power plant is built on the island or not.
The contamination exists both on the BLP portion and the GH City owned portion of the island. The BLP ratepayers, and tax payers of the City of Grand Haven and hopefully the State and Federal government will likely pay for the cost of the cleanup. This clean-up would be done over many years, if not decades.
Is burning methane gas cleaner than coal in terms of the climate impact?
Burning methane gas is certainly cleaner than burning coal, but that does not take into account the cumulative impacts of leaking methane. When methane that leaks that occur during drilling and transport are taken into consideration, it is worse than coal energy generation from a climate perspective. It is a more destructive greenhouse gas. The BLP’s PR campaign suggests that CO2 emissions will be reduced by 96% with the proposed plant. Right now, there is NO CO2 emission from power generation in Grand Haven.
Why should Grand Haven invest in a clean energy future when China is still building coal-fired power plants?
Why shouldn’t we be among the leaders in the global clean energy transition? Worldwide, there is an increasing commitment to responsible energy use. Grand Haven has already gone through the transition from having fossil fuel-burning electricity sources (Diesel plant to Coal Plant, to now buying off the grid). Why go backward to build a plant that harms our climate? Interestingly, even China and India are transitioning away. China, for example, is the world’s largest producer of Solar panels