Remember The Fear Of Blackouts

December 20, 2002
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ZEELAND — What a difference two years makes.

In December 2000, the public and private sectors in Michigan figuratively were shivering because of what looked like a possible California-style power crisis complete with rolling blackouts.

“For more than five years,” as one paper put it, “the state has teetered on the brink of a catastrophic shortfall in electric power … the state doesn’t generate enough power. Michigan’s two largest electric utilities haven’t opened a large power plant in nearly 15 years (and have) roughly the same generating capacity as they did 10 years ago.”

But then, with electric utility deregulation — or re-regulation — scheduled to go into effect Jan. 1, 2001, the cavalry seemed to be charging to the rescue.

Atlanta-based Southern Energy Inc., (now known as Mirant Corp. — that in 1998 bought 48 acres of land from Herman Miller — broke ground for construction of a gas-fired co-generation merchant plant in Zeeland.

Weeks after that, Panda Energy International, of Dallas, announced plans to construct a similar plant in Tallmadge Township, just west of the Kent-Ottawa county line.

Both firms were planning phased construction, first of gas-fired generating plants and — in subsequent phases — so-called co-generation plants, which use steam from the gas-fired plants to spin another set of electrical turbines.

Panda’s original project schedule called for completion in 2004.

Both firms were keying off the availability of water in Ottawa County, the presence of a major gas line and ample Consumer’s Energy transmission lines giving access to all of Michigan and five other Midwest states.

Southern Energy’s Zeeland plant, with a final phase capacity of 850 megawatts, was to produce and sell peaking power for times of high demand.

Panda’s plans were to market 70 percent baseline load and 30 percent peaking power.

Peaking plants operate only when the demand for power is high and, accordingly, rates are, too — sometimes as much as 100 times the standard rate.

The appeal of peaking rates, meanwhile, caused Consumers Energy to bring several old, off-line generating units into compliance with air pollution requirements. The firm now uses those plants to supply peaking power, too.

Now, two years later — two years with relatively mild summers and winters — the sense of urgency about electrical power in Michigan seems to have eased. Recession seems to have tempered what previously appeared to be runaway demand for electricity. Too, the supply of peaking power in the state has increased substantially.

The second phase of construction at the Zeeland plant is complete and the plant has been on line for nearly five months, generating up to 750 megawatts.

By adding co-generation steam units in a third phase of construction, the Zeeland plant could produce up to 850 megawatts. But as of this writing, Zeeland officials say that Southern Energy isn’t seeking any new construction permits.

Meanwhile, Panda’s plans for a 1,000-megawatt plant to market primarily less expensive baseline power loads are on indefinite hold.           

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