ESCANABA - Three key people from the local power industry presented updates Monday on past, current and future projects that fuel the region's economy, including windmills, transmission lines and the Escanaba power plant.
The three representatives were guests of the Bay Area Economic Club, which brings speakers to the area to talk on economic issues of regional and national importance. The event was held at Bay College.
Monday's program included Charles Detiege, president of Escanaba Green Energy (EGE), which is in the process of buying the Escanaba power plant to convert it to burn biomass. Brett French, regional manager of external relations for the American Transmission Company (ATC), spoke about transmission line projects underway. Rick Wilson, representing Heritage Sustainable Energy (HSE), updated the group on the installation of windmills on the Garden Peninsula.
ESCANABA GREEN ENERGY
Detiege said EGE's purchase of the coal-fired power plant is moving forward with the approval of a $30 million loan from a private financing company in Europe.
He explained the funds include $1.6 million to buy the plant, more than $1 million for the coal supply, $18 million or more for the plant's conversion to biomass, $4 million on other capital improvements, and other expenses such as legal fees and development and financing costs.
Detiege said he expects the power plant sale to close by Thanksgiving. Plans call for the first of two boilers to be converted to burn biomass by October 2013. The second boiler would be converted by December 2013, he said.
Economic benefits of the project include retaining current employees and hiring more workers, said Detiege. More than $1 million a year in parts and services are expected to be purchased from local vendors, he noted.
The new plant is also expected to generate $5 million annually for the region's economy with the biomass purchases; an estimated 75-100 spin-off jobs are also anticipated, he said.
Detiege said the company's decision to buy the plant and convert it to burn biomass was based on several factors including the fact that wood biomass is renewable and abundant in the Upper Peninsula. The cost of wood fuel is cheaper than coal, government premiums are paid for green energy, and the plant's boiler system can be converted from coal to burn biomass, he added. Wood types that will be accepted at the plant include slash, clean construction debris, sawdust and bark.
AMERICAN TRANSMISSION COMPANY
French updated the group on several ongoing and upcoming transmission projects in the region, describing ATC's role as the link between power sources and customers.
ATC has invested $365 million in Michigan to date and anticipates investing more than $300 million during the next decade, he said.
"We're trying to keep the lights on," he commented.
From a consumer's point of view, French said transmission costs represent about 10 percent of a retail customer's electric bill. The major portion of an electric bill is the cost to generate electricity which is mainly fuel expenses, he added.
French outlined local projects including the expansion of the Chandler Substation at NewPage. The $9.3 million project was placed in service earlier this year. A $25 million construction project to install transmission line from the substation to Old Mead Road is being planned for next year, contingent upon procurement of land rights, he said.
French reviewed a number of other multi-million-dollar projects in the U.P., stating the additional transmission infrastructure is essential to meeting the region's current and future needs.
The new and upgraded lines address power load changes, the risk of transmission outages, reliability concerns, changes in the power market and new federal rules and regulations, French explained.
HERITAGE SUSTAINABLE ENERGY
Wilson said HSE began wind projects in Michigan in 2004 when the company saw business opportunities and long-term value for developing renewable energy resources. A factor in the equation was the state's mandate requiring electric providers source 10 percent of their energy from renewable resources by 2015, he said.
The company's $10 million project on the Garden Peninsula consists of the installation of 14 windmills, expected to generate 70,000 megawatt hours of renewable clean energy annually. This could power nearly 7,000 average households.
The local windmills generate electricity for Consumers Energy. Additional HSE clients that buy wind power from the company's other wind farms in Michigan include DTE Energy and Traverse City Light and Power.
Wilson said four criteria the company analyzes for possible windmill sites are: a good wind resource, available transmission lines, suitable landscape (typically open agricultural land), and community support.
Benefits windmills bring to communities, like the Garden Peninsula, include personal property taxes the companies pays, he said. The project also provides additional long-term revenue in land lease and royalty payments estimated at $370,000 a year to landowners.
The Garden Wind Farm project generated more than 75 local jobs including a half dozen full-time permanent jobs. More than 40 local and regional business in the U.P. were used for services, supplies, fuel, equipment rental, food and lodging.