Law, Manufacturing, and Sustainability

Consumers Energy reaches settlement with EPA

It will spend more than $2B to reduce air pollution.

October 24, 2014
| By Pete Daly |
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Consumers EPA
Consumers Energy’s J.H. Campbell plant in West Olive is a beehive of activity during a $1 billion upgrade to emissions control equipment. Photo by Johnny Quirin

(As seen on WZZM TV 13) Consumers Energy reached a major settlement in federal court in September with the U.S. Environmental Protection Agency and the U.S. Department of Justice that will require the utility to spend more than $2 billion upgrading equipment to reduce air pollution at its coal-fired plants.

The settlement resolves alleged past violations of the Clean Air Act, although Consumers said it is not an admission of wrongdoing on the part of the company.

The agreement requires Consumers to close seven of its coal-fired generating units, including two boilers and generators that comprise the B.C. Cobb power plant on Muskegon Lake, by April 2016. The settlement also entails a $2.75 million civil penalty.

The biggest project is a $1 billion upgrade of emissions control equipment at the coal-fired J.H. Campbell Complex in West Olive, which actually began in 2010 and will be completed by 2016.

Some of the air pollution improvements at Consumers’ remaining coal-fired power plants were completed several years ago and others, like Campbell, were well underway even before the settlement was reached. Before the current $1 billion upgrade began in 2010, Consumers had spent about $500 million at Campbell to reduce emissions.

“The air in Michigan is as clean as it has been in generations, and these enhancements only make the air cleaner,” said Roger Morgenstern, senior public information director at Consumers.

Consumers is one of many utilities and power-generating companies with power plants reviewed as part of the EPA’s Coal-Fired Power Plant Enforcement Initiative that began in 1999. So far, the government has reached more than 25 settlements nationwide.

John Russell, Consumers Energy’s president and CEO, said Sept. 16, “Today’s settlement concludes over five years of negotiation with the EPA and U.S. Department of Justice and fully resolves these issues with the government.” He said the utility is “moving forward with our plan to continue to improve air quality, move to a cleaner generation portfolio.”

The $2 billion in upgrades at its coal-fired plants will reduce all major emissions into the air, including mercury, sulfur dioxide, nitrogen oxides and particulate matter.

The EPA in 2007 and 2008 alleged Consumers had violated federal environmental regulations involving smoke density emitted by power plants, as well as requirements to obtain certain permits and install emissions control equipment.

Consumers previously announced it would close its seven oldest coal-fired generating units. Three of the units are at the J.R. Whiting Generating Complex near Luna Pier on the shore of Lake Erie in Monroe County; two comprise the Cobb power plant, and two are at the Karn/Weadock Generating Complex near Bay City. The generating units together are capable of producing about 950 megawatts, and will comply with new interim emissions limits until they are closed.

Morgenstern said Consumers is already working with the city of Muskegon, Muskegon County and various local organizations to position the site of the Cobb plant for future use. It employs 90. He said Consumers is reducing the workforce through retirements and working with union and non-union workers to help them find other jobs within Consumers.

Once shut down, Consumers will demolish the plant, although Morgenstern said he was not sure if the utility plans to continue ownership of the site. The Cobb plant is about 60 years old, and is a “relatively small site,” according to Morgenstern, generating only up to 320 megawatts, compared to 1,450 at the Campbell complex about 30 miles south near the shore of Lake Michigan.

Cobb burns about 600,000 tons of coal a year, delivered by lake freighters. Because of that, it has a deepwater dock to accommodate large vessels, which Consumers maintains could be a factor in the future growth of Muskegon harbor as a port serving global shipping. The dock was upgraded by Consumers a few years ago, modified to comply with Homeland Security requirements, and the utility is working with the local governments to promote that.

The Campbell complex, with three separate generating units, is Consumers’ largest coal-fired generating location in the state, producing enough electricity for a city of 1 million and burning about 6 million tons of coal annually, all delivered by rail, mainly from Wyoming and Montana.

Campbell’s two smaller and older generating units are in one building. Unit 3, added later, is the company’s single largest coal-fired boiler/generator and is in a separate building. It produces more than 800 megawatts of the plant’s total 1,450.

Almost 300 Consumers Energy employees work at the complex, but the construction for air quality improvement now involves more than 600 workers. At least 10 contractors and subcontractor companies are at work on the site.

Morgenstern said with all the activity going on at Campbell, it looks “much like a construction site that happens to have three very large power plants on it.”

Also under the settlement, Consumers will invest at least $7.7 million in environmental mitigation projects, including up to $4 million on the development or installation of renewable energy projects, including wind, solar or anaerobic digestion.

Other stipulations in the settlement require Consumers to:

  • Make a $500,000 payment to the National Park Service for restoration efforts at Sleeping Bear Dunes National Lakeshore Park in Leelanau County in northern Michigan, as well as Cuyahoga Valley National Park in Ohio.
  • Spend up to $500,000 in energy efficiency for low-income residents and public schools.
  • Spend up to $2 million for the acquisition, donation and restoration of ecologically significant lands, watersheds, vegetation or forests in or near Consumers Energy’s service territory.
  • Allocate from $1 million to $2 million on rebates and subsidies to help individuals replace or retrofit wood-burning stoves.
  • Spend up to $3 million to replace gas- and diesel-powered fleet vehicles with alternative fuel or compressed natural gas vehicles, retrofit fleet vehicles with engines designed to reduce emissions, and build one or more charging stations for electric or compressed natural gas vehicles.

Consumers has almost 6,000 megawatts of generating capacity fueled by coal, oil, natural gas, hydro dams and wind farms. More than 32 percent of its generation is by coal, and slightly less by natural gas.

Consumers Energy is Michigan’s largest utility, the principal subsidiary of CMS Energy (NYSE: CMS), providing natural gas and electricity to 6.5 million of the state’s 10 million residents in all 68 Lower Peninsula counties.

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