Collateral damage

October 14, 2011
| By Pete Daly |
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Grand Valley State University’s Michigan Alternative and Renewable Energy Center in Muskegon just put its new $1.6 million, high-tech 10-ton research buoy in Muskegon Lake, and within days it will be anchored four miles out in Lake Michigan to begin collecting data on the feasibility of offshore commercial wind turbines in the Big Lake.

However, even as GVSU and its partners in the long-term research project were dedicating their buoy in early October, “we had a major setback,” said Arn Boezaart, director of MAREC.

The setback is the unanticipated loss of almost one-third of the funds required to complete the $3.3 million Lake Michigan winds study over the next two years. The $1.36 million grant for analysis of the data was contained within $62 million in Low Income Energy Efficiency Fund grants announced by the Michigan Public Service Commission in June, which was raising the money by adding surcharges to gas and electric bills in the state.

LIEEF funds have been collected by the MPSC for years to help low-income families pay winter heating bills, but a very small portion of the total raised has been earmarked for energy research projects that could benefit all energy customers.

The Association of Businesses Advocating Tariff Equity, or ABATE, a nonprofit coalition of about 16 large companies mainly in southeast Michigan, challenged the MPSC’s authority to put the surcharge on energy bills, and won in court in July.

The latest round of LIEEF grants were to be disbursed with the start of the new state fiscal year — Oct. 1. It did not happen.

“So at this moment in time, you could say the (LIEEF) fund doesn’t exist,” said Judy Palnau, a spokesperson for the MPSC.

The ABATE website states its members include Ford, GM and Chrysler, plus Alcoa, Cargill, Dow Corning, Enbridge Energy, Marathon Petroleum Co., Martin Marietta Magnesia Specialties and others. ABATE was formed “to represent industrial and other large-volume energy customers in gas and electric regulatory and legislative matters. ABATE is concerned about the rising costs of energy and utility rates and their impact on the business climate in Michigan,” according to the website.

“ABATE believes that industrial utility customers must not be required to subsidize other classes of utility customers. … Industrial energy customers also should not be required to pay for social/welfare programs or for programs which provide no direct benefit through their utility bills.”

Boezaart said the LIEEF legislation expired in 2008 and a new law subsequently was passed to replace it. “But apparently the wording was changed, and ABATE argued that the new law did not permit the Public Service Commission to continue charging industrial/commercial customers this add-on, this supplement for low-income energy assistance,” he said.

ABATE sued and on July 21, the Michigan Court of Appeals ruled in favor of ABATE, “and I’m sure it just totally passed under everybody’s radar screen,” said Boezaart.

On Sept. 1, he added, the MPSC advised all the Michigan agencies and organizations receiving LIEEF funds — including MAREC — that the contracts for the new fiscal year were cancelled.

Boezaart said the situation facing MAREC “is serious, but we’re certainly not the only ones affected. We’re collateral damage. We just sort of got caught up in the fray, but there we are — it did cost us a million dollars.”

Federal money from the Department of Energy, plus contributions from the University of Michigan, Sierra Club and W.E. Energies of Wisconsin, paid for the buoy and hardware for collecting and transmitting the data on offshore Lake Michigan winds and conditions. The state of Michigan, through the MPSC, had committed to providing $1.36 million for analysis of the data by several Michigan universities. Boezaart said MAREC has already spent about $200,000 of the grant.

The suspension of the LIEFF program “has in effect shut down the research work because the research work is done by people, not by machines,” said Boezaart. “So the dollars that were going to pay the researchers and graduate assistants and graduate students’ stipends — all that is lost at this point.”

“We will have the data,” he said, and in fact, the buoy already has begun collecting data on Muskegon Lake, which will be stored. “But the hours needed to interpret … and analyze the data and draw conclusions — all that time and money (to pay for it) is what we are missing at this point.”

Palnau said the MPSC filed an appeal with the Michigan Supreme Court Sept. 1, and she is aware of legislation that has been introduced in the Michigan House of Representatives as a possible “legislative remedy” to the defeat of the LIEEF program by ABATE.

Palnau said the MPSC has also instructed the state’s two major utilities, Detroit Edison/MichCon and Consumers Energy, to continue collecting the surcharge on gas and electricity bills and putting those funds in escrow for the time being. The MPSC, she said, did not want to “act hastily” while the appeal to the Supreme Court is underway.

The LIEEF funds did three things, said Palnau: It helped pay some of the cost of winter heating for low-income families, helped pay for weatherization and other energy-efficiency improvements at low-income homes, and it subsidized energy-efficiency projects “that benefit all customers,” which included the MAREC research in wind power potential out in Lake Michigan.

“The vast majority goes to low-income purposes,” she said.

Boezaart said GVSU legal counsel also has become involved in challenging the appeals court ruling. He said the federal grant was contingent on partial matching amounts from MAREC, most of which would have been from LIEEF funding.

“On Oct. 20th, we’re going to have a major conversation with the federal government to see how all this plays out and what the fed’s expectations might be,” said Boezaart.

MAREC’s buoy will be brought back to shore in November. Boezaart said that next year, “if all goes according to plan, and if we can put the funding package together — this is where the dollars become more important — then the plan is to deploy it at the middle of Lake Michigan at the place called the Mid-Lake Plateau,” where the bottom is only about 150 feet below the surface.

Boezaart said MAREC and its partners in the project are hoping to find people who would be interested in joining the effort by helping to underwrite the research cost. Those could be either the public or private sectors, he said.

“We’re fairly confident, now that that we have the asset — the buoy — in hand, that we’ll come up with a way to underwrite or finance the research,” said Boezaart.

The buoy sends continuous wireless data to the GVSU Padnos College of Engineering and Computing, where it was to be evaluated and analyzed by researchers. The data was also to be forwarded to engineers at the Michigan Memorial Phoenix Energy Institute at the University of Michigan for an in-depth analysis.

The Michigan Natural Features Inventory of Michigan State University Extension was slated to study the sonar data transmitted by the buoy related to the presence of birds and bats over Lake Michigan. Potential bird and bat kills by spinning turbine blades are a major issue raised by opponents of commercial wind turbines.

Boezaart has said previously the data will become “publicly available because it’s being collected with state and federal funds.”

The buoy contains a laser wind sensor that can simultaneously measure wind speeds at various heights above the buoy, up to 150 meters, which is about as high as the hub on the largest commercial wind turbines. It will not be deployed in the lake during winter months.

Boezaart said previously that the buoy will be anchored closer to the shoreline of West Michigan in 2013, perhaps at a distance of six miles out.

W.E. Energies, the trade name of Wisconsin Electric Power Co., a subsidiary of Wisconsin Energy Corp., has been described by Boezaart as a financial partner in the lake winds research project because it could materially benefit from the study, too.

This project is the first time the new laser wind-sensing technology is being used on a floating platform in the Great Lakes, according to Boezaart.

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