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Mark Nixon : 517-702-6735 MDN@LBWL.COM

BWL to seek construction of hybrid biomass generation plant

The Lansing Board of Water & Light this week announced plans to replace an aging power plant with a new, cleaner, more efficient generation plant on its property in Delta Township west of Lansing .

"After an exhaustive study by a respected consulting firm, and after scrupulous review by our BWL staff, we believe a new generation plant is the smartest, most economical and most environmentally sensitive option we have," said General Manager J. Peter Lark.

Lark added: "This company is faced with a decision: Build a new, more efficient plant with a smaller carbon footprint to replace an old plant that will have to close in the next 10 to 15 years; OR, buy electricity on the open market, which can be highly volatile and will be very expensive."

Lark noted that as the plant is being constructed over a five-to six-year period, BWL customers will pay - through phased-in rate increases - an estimated 18-21 percent more for electricity. However, if no plant is built, those customers will likely pay 52 to 55 percent more for their electricity. That is because the electricity would have to be purchased on the pricey open market.

Since other Michigan utilities face the same cost increases and capacity needs, the BWL expects to remain one of the lowest-cost electric utilities in the state.

"Our analysis concludes that it will be better economically, and much less risky, to build a plant rather than buy the electricity," Lark said.

Moreover, the BWL has reaffirmed its commitment to renewable energy and energy efficiency to meet an anticipated 1.4 percent annual growth in demand for electricity by BWL customers.

"All new growth will be satisfied by renewable energy and energy efficiency efforts," Lark said. "We firmly believe that renewables such as landfill gas, solar, wind, hydro and biomass, along with a significant and long-term energy efficiency program for our customers, will satisfy increased demand for electricity," Lark said. "However, we still must have a replacement plant for our aging workhorse, the Eckert station."

Other details of the BWL plans for new generation include:

•  The BWL plans to build a 350-megawatt hybrid plant, designed to burn both coal and biomass to generate electricity. The BWL estimates the plant will burn about 70 percent coal and 30 percent biomass. Biomass material such as crop residue, waste paper and waste wood are considered renewable energy resources, and are carbon neutral.

•  This new plant will be the largest hybrid biomass generation plant in the State of Michigan .

•  The cost of the plant will depend on its size. A 350-megawatt plant is estimated to cost about $1 billion.

•  Of the 350 megawatts, the BWL anticipates needing about 250 megawatts. The BWL plans to partner with other municipal utilities for the remaining 100 megawatts of electricity.

•  Because of its age and environmental regulations, the Eckert Power Station must eventually be retired. Portions of the plant are 55 years old.

•  The new generation plant to replace Eckert will be more efficient and will create a smaller carbon "footprint" than Eckert. Further, emissions of mercury, sulfur dioxide and nitrogen oxides will be significantly less than present emissions.

•  Construction of the new power plant would mean more than 700 construction-related jobs for the Greater Lansing community.

•  The BWL will convene a community task force in the coming months. The task force will be charged with reviewing the findings of the independent study and the BWL staff recommendations.

•  By the end of 2008, the BWL expects to file permits to build the plant with the Michigan Department of Environmental Quality.

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