By Chris Bzdok
---- — The April 4 Record-Eagle included a forum by Kurt Krueger, arguing wind power is uncompetitive with energy from conventional sources. Mr. Krueger is mistaken. Wind power has proven to be good for Michigan — economically and otherwise. We should build on that success, not tear it down.
Wind power is getting cheaper, while coal costs are rising. Consumers Energy initially estimated wind power would cost 17 cents per kWh. Recent Michigan wind contracts have been coming in around 6 cents. Consumers has dropped its renewable energy surcharge from $3 per month for residential customers to 54 cents.
On the other hand, Detroit Edison projects coal costs will rise 9 percent this year, and 33 percent in five years. Power from old, depreciated coal plants is cheap now because demand is low — due to economic conditions, cheap natural gas, and energy efficiency. This will change in 2015, when up to fourteen in-state coal units will be retired or "mothballed." Utilities will spend billions on remaining plants to install equipment to control mercury, acid gases, and particulates.
It's crazy to abandon wind energy — whose price is falling — to rely solely on sources whose costs are rising. The "fuel" for wind power is free. And wind's intermittency can be covered economically with natural gas — as Jim MacInnes explained in a recent Record-Eagle forum.
Wind power is cheaper than energy from a new coal plant. As Mr. Krueger points out, the original estimate for the long-term cost of a new coal plant was 13.3 cents per kWh, which included hypothetical carbon taxes. Last year, Consumers updated this estimate to 10.7 cents — with no carbon costs assumed through 2015. Recent utility estimates for the long-term cost of renewable energy are nearing nine cents, cheaper than new coal.
Consumers also concluded last year that the cost of renewable energy, plus savings from energy efficiency, was $1.5 billion less than the cost of energy from a new coal plant. And Consumers was proposing to build a new coal plant at the time.
Wind power is good for Michigan's economy. This year, Consumers and Detroit Edison will spend $1.4 billion importing coal from Appalachia and Wyoming. By contrast, 24 renewable energy projects have been built here, by Michigan workers. Wind projects sign leases with farmers, providing extra income without taking up much land.
Wind power can succeed without federal subsidies. The main tax credit for wind energy has not been extended past this year. The utilities assume it won't be, yet are on track to meet Michigan's 10 percent renewable energy standard anyway. Meanwhile, tax credits for fossil fuels live on.
We should build on renewable energy's success. A group called "Michigan Energy, Michigan Jobs" is circulating petitions to raise our renewable energy standard to 25 percent, while capping rate increases from this energy at 1 percent per year. Visit http://mienergymijobs.com to learn more.
Other Great Lakes states have increased their renewable energy standards beyond 10 percent. We can lead with them, or lag behind.
Shouldn't we lead?
About the author: Chris Bzdok is a Traverse City lawyer. He represents the interests of residential customers and environmental groups in electric utility cases before the Michigan Public Service Commission. He is a former mayor of Traverse City.
About the forum: The forum is a periodic column of opinion written by Record-Eagle readers in their areas of interest or expertise. Submissions of 500 words or less may be made by e-mailing email@example.com. Please include biographical information and a photo.