The New Power Generation

December 15, 2005
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GRAND RAPIDS — In 1880, a switch was thrown at the Wolverine Chair Factory in Grand Rapids. The filaments of 16 lamps sparked to life. The power feeding the glowing lights came from a wire coil generator connected to a water wheel spun by the flow of the Grand River. It was the first time in the country's history that hydropower was converted to electricity.

Despite an auspicious start in renewable energy generation, the vast majority of Michigan's electricity over the past 125 years has come from burning fossil fuels. The second largest electrical and natural gas provider in the state would like to change that.

In September, Consumers Energy debuted a new renewable energy campaign called Green Generation. The goal of the campaign is to encourage investment in renewable energy sources such as hydropower, wind generation and landfill gas capture. Shortly after the campaign kickoff, Consumers inked contracts with eight renewable energy producers throughout the state. Those generators include three wind turbine "parks" and five landfill-gas capture plants. Four of those contracts pertain to plants that are yet to be constructed, including a contract given to Zeeland Farm Services Inc. in Zeeland

The investment in these facilities is funded through an existing monthly charge of 5 cents per meter, through Consumers' Resource Conservation Plan budget, and also through optional surcharges paid by customers. Those customers choose to pay a surcharge on their bill to encourage Consumers to invest in green electricity generation.

According to company spokesman Dan Bishop, Consumers is relying on support from customers to help defray the costs of an otherwise more costly endeavor.

"Renewable energy is just a little bit more expensive than power generated from 'baseload' (i.e. round-the-clock) power plants like coal or nuclear," Bishop stated. The contributions from customers help to offset that difference. Also, because of state regulations, if utilities apply surcharges to their customers' bills in order to fund renewable energy generation programs, the surcharges must be voluntarily agreed to by the customers.

For $2.50 each month, for example, a residential customer can purchase one GreenBlock — an artificial unit that corresponds to 150 kilowatt-hours of renewable energy. That $2.50 is then added on to the amount the customer is charged for actual electricity use. Buying GreenBlocks does not replace or lower those charges. High volume customers, including businesses, can purchase the GreenBlocks at a slightly lower price.

J. Peter Lark, chairman of the Michigan Public Service Commission, lauded the Green Generation program at the September launch celebration at MeijerGardens in Grand Rapids

"Every customer who participates in the Green Generation program will makeMichiganless dependent on traditional fossil fuels that produce emissions and, in the case of natural gas, are increasingly in short supply," he said. "The result will be improved electric reliability, a cleaner environment, and more jobs forMichigan."

One result will not be a guarantee that the electrons used by Green Generation participants will come from renewable sources. Steve Stubleski, project manager for Green Generation program, explained that the power flows from the renewable sources onto the larger network of electrical generation and storage facilities known as "the grid," so it's not possible to say that customers who sign up for the service are more likely to actually get their electricity from wind turbines than coal-fired plants.

More than 68 percent of Michigan's electrical generation comes from coal-burning plants. But that is changing. Even before the Green Generation program began, Consumers Energy had already established a track record with renewable energy generation. Bishop said that the company had already incorporated 13 hydroelectric plants and multiple wind and landfill-gas plants into its "generation mix."

Consumers Energy is not alone in its efforts. All of the state's major electrical utilities have "green billing" plans akin to the Green Generation program, as well as varying levels of renewable generation. Similar programs can be found in every state in the country, according to the U.S. Department of Energy.

Stubleski said that his company's commitment to renewable sources stands out compared to many of its peers.

"Consumers Energy's total generation mix for renewables is about 5 percent. And when you compare that to the other large, Midwest electric companies, I think that you're going to find that we far exceed any of their performance in that area," said Stubleski.

Consumers does not have a stated goal of increasing that mix, although building the capacity to do so is certainly the goal of the Green Generation program. By the time all eight of the current renewable energy generation contractors have established their plants, they will supply enough electricity for approximately 30,000 of Consumers' 1.8 million electricity customers. The higher the buy-in to the Green Generation program, the more investment in green power generation Consumers will be able to make.

According to Stubleski, that's not just a question of ecology. It's a question of economics.

"We'd like to see what kind of economic development benefits we can derive from facilities that would be located here in the state," said Stubleski.

The eight plants Consumers has currently contracted are all in the company's service area, which covers most of the Lower Peninsula

So far, the campaign has not sparked a great deal of interest among customers. As of Dec. 1, Green Generation was only 700 members strong. Stubleski was not discouraged, saying that the company plans to begin a new Green Generation marketing campaign after the first of the year. A second campaign targeting businesses will follow later in the year.     

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