Greater Lansing's Energy Future

The BWL's Eckert Power Plant near downtown Lansing is more than a half-century old, though it was designed to only last 40 years. Increasing operations and maintenance costs, environmental compliance costs, and the plant's relatively poor efficiency make it ever more expensive to keep it operating. The cost to meet potential environmental regulations at the plant could amount to approximately $260 million in the next few years. The BWL staff recommends building a new, more efficient power plant whose air emissions, including greenhouse gas emissions, are much smaller than Eckert's.

In part, yes. However, the recommendation is to build a “hybrid” plant that allows the BWL to use renewable fuels such as agricultural waste, wood waste and other renewable fuel sources, in combination with coal. It's important to emphasize that new technology will allow the plant to burn fuels more cleanly and efficiently than Eckert does.

 

This partly depends on how long it takes to acquire the necessary permits, get bonding approved, etc. Plus, the cost of new power plants in the U.S. , and worldwide, has been increasing. The cost is also dependent on the plant's size – how many megawatts of power it's capable of generating. It's safe to assume that a new power plant will cost at least $750 million – more if the size of the plant is bigger.

Energy costs across the United States and throughout the world have been increasing rapidly over the past few years, and are expected to continue increasing in the foreseeable future. There is no way to confidently predict how much customers will pay when a new plant comes online, 7 to 10 years from now. However, the BWL staff has undertaken a major computer modeling program to assess the Lansing community's future electric energy needs and the best way to meet those needs. Replacing the aging Eckert power plant with a new, more efficient plant is one part of a plan to assure that BWL customers will pay the lowest cost possible for electricity. Doing nothing and relying on wholesale electric prices is projected to cost Lansing-area ratepayers much more through higher rates.

Actually, the BWL plan assumes that growth in electricity demand can be met by a combination of conservation and using renewable energy. But that still leaves us with an aging plant that will need to be replaced within 10 years. That's why the plan calls for renewable energy, a comprehensive energy conservation program, and a hybrid power plant.

The BWL owns land near its Erickson Power Plant in Delta Township.
The recommendation is to build a new generating plant on that land.

 

 

The rule of thumb in the utility industry is that a power plant takes about five to six years to build, once building permits are acquired. It can take up to five years to receive the necessary permits to build and operate a new generating plant. Using these time-frames, the BWL staff expects the plant could be operational by 2018.

The wholesale market is where some utilities buy needed power. However, that market is volatile. The BWL (and thus its ratepayers) would be at the mercy of the market price, and almost certainly the BWL would pay more for wholesale market electricity than electricity generated by the BWL.

Yes. There is also an opportunity for other municipally-owned utilities to invest in the BWL's new power plant. Sharing the costs will lessen the BWL's financial obligation by a shared-risk arrangement.

Finally, a new power plant would mean thousands of construction jobs and other jobs related to the project. That will be an economic stimulus for the Greater Lansing community.