DELTA TOWNSHIP, MI — Michigan regulators on Friday cleared DTE Energy's request to build a near-$1 billion natural gas power plant, the first approval of such a large facility for a regulated utility in decades and a move that coincides with the retirement of coal-fired plants.
DTE, which provides electricity to 2.2 million customers in southeastern Michigan, plans to start construction in 2019 and to open the 1,100-megawatt plant in 2022. It will be located at the company's Belle River Power Plant site in St. Clair County's East China Township.
The 3-0 decision drew praise from manufacturing groups, unions and local economic development officials and criticism from environmental and public health advocates. Before voting, the three-member state Public Service Commission chastised DTE for "troubling behavior" in the process — such as allegedly engaging in an uncivil, bullying tone in legal briefs and not adequately providing information — but ultimately agreed to authorize construction.
"This plant has the best combination of operational, reliability, environmental and financial attributes to help fill a significant need for power and position Michigan for a successful transition to a cleaner energy future," said Sally Talberg, the commission's chairwoman.
The last time Detroit-based DTE opened a new major plant was 1988. The state's most recent major new power plant — the Midland Cogeneration Venture, an incomplete nuclear plant that was converted to a natural-gas fired facility — began operating in 1990. It was initially co-created by Michigan's other dominant utility, Jackson-based Consumers Energy.
Environmental and other groups criticized the order.
"Given the availability of lower-cost clean energy alternatives, this decision exposes Michigan ratepayers to unnecessarily high rates, a litany of risks associated with fossil fuel dependence and significant levels of pollution and carbon emissions," said Sam Gomberg, senior energy analyst at the Union of Concerned Scientists' Midwest office. He said DTE's proposal was based on unreasonably optimistic projections about natural gas prices and inaccurate assumptions about the price and capabilities of cleaner energy.
Talberg said the commission extensively evaluated whether Michigan could solely meets its electricity needs through renewable sources and energy-efficiency programs, but "we did not feel comfortable that the savings levels were accurate — associated with those alternatives. Also there was concern with the timing of being able to scale up those different options under this timeframe, relative to the need with the closing of power plants."
DTE Electric President and Chief Operating Officer Trevor Lauer said the utility last year committed to reduce its carbon emissions by more than 80 percent. He said DTE operates 13 utility-scale wind farms and 31 solar parks and will double its renewable energy capacity over five years.
"We're really happy with the decision today. It complements the renewable energy mix we continue to add in, and this gas plant is really important to have a baseload facility that can operate with renewables that we continue to add into the energy mix," he said.
In 2017, DTE's sources to produce electricity were 65 percent coal, 21 percent nuclear, 9 percent renewable and 5 percent natural gas. Under the commission's order, customers will see the plant's $951 million in construction costs reflected in rates once it opens.
While commissioners blessed DTE's plant, they criticized the company's conduct during the nine-month process and included in its order a directive to communicate more effectively with the public and interested parties, particularly in explaining and exchanging modeling assumptions and data.
Commissioner Norm Saari referenced "name calling" and "attempts at legal bullying" in the utility's written filings.
Lauer said he was disappointed to hear the commissioners' comments and "that's not the way we would ever want to be portrayed." He conceded it "got heated at times" and DTE will review what happened and try to learn from it. He said the company tried to be transparent, adding that the state had not considered such significant certificates of necessity in a long time.