Zeeland Plant Riding To Energy Rescue In June

June 5, 2002
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HOLLAND – Michigan's newest power plant should begin generating electricity within two months, providing some relief to the state's strained electrical resources.

Mirant Corp., the energy company spun off this month from Atlanta-based Southern Co., is testing the first phase is its new natural gas-fired plant in Zeeland. The company expects to bring 300 megawatts of power online in June, adding precious generating capacity to the state's electrical grid.

The plant is now in "start-up mode." The actual day it will contribute to the transmission grid depends on how well tests go, spokeswoman Jamie Stephenson said.

"It will depends on if they have problems with the tests," Stephenson said. "If everything goes smoothly, it could be earlier or it could be later."

The 300-megawatt first phase represents just a portion of the capacity Mirant is building in Zeeland. Construction continues on the remaining 530 megawatts of generating capacity that Mirant hopes to have completed and operating by 2003.

The Zeeland plant is designed to operate as a "merchant" facility, generating power that Mirant will sell directly on the wholesale market to utilities that will then sell it to commercial and residential customers.

Mirant, which operates 75 plants in North America that generate 20,000 megawatts of electricity, has secured an initial customer for the power generated in Zeeland, but won't identify them until after the plant becomes operational. A spokesman for Consumers Energy Co., the state's second largest electric utility, with 1.7 million customers statewide, says the company is "in serious discussions" with Mirant.

The Zeeland plant will become the first of several facilities planned in Michigan to begin operations at a time when new generating capacity within the state is in high demand. The state's power reserve has been hovering around five percent in recent years, below industry standards, Consumers Energy, the primary power provider in West Michigan, has said it will rely on transmitting power from other states this summer on days when peak demand exceeds generating capacity.

The reliance on out-of-state generating capacity has worried many in Michigan, including a coalition of the state's largest manufacturers.

To David Waymire, spokesman for ABATE, of the Association of Businesses Advocating Tariff Equity, the new generating capacity within Michigan cannot come online soon enough. Reliability is a "huge issue" to ABATE's members, Waymire said.

"Hopefully this will allow us to have good, reliable energy," Waymire said. "It's a very important opportunity for Michigan."

Waymire, however, would prefer that Mirant and the other companies developing new power plants in Michigan operate them differently. He'd rather see them sell their electricity direct to consumers, rather than to utilities such as Consumers Energy and Detroit Edison, in order to generate competition and, in theory, lower prices in Michigan.

"Unless we have direct retail sales, we will not achieve real competition," he said.

Construction, meanwhile, is expected to begin later this year on another merchant power plant proposed in West Michigan. Dallas, Texas-based Panda Energy will develop the 1,000-megawatt, $350 million natural gas-fired facility in Ottawa County's Tallmadge Township.

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