Plan B: The Right Decision at the Right Time

Throughout the nation, utilities are finding it increasingly difficult to justify the construction and expansion of conventional coal-fired power plants as a prudent investment of ratepayer funds.  Uncertain economic and investment conditions, escalating coal prices, decreasing electricity demand and a growing social movement towards addressing climate change have significantly diminished the acceptance of conventional coal as our dominant electrical resource of the future.  As an alternative to new coal, leading utilities are trying to formulate balanced portfolios that include significant investments in energy efficiency and renewable energy.

While we appreciate the dialogue the Lansing Board of Water and Light has started on the Lansing area's future energy needs, we still look forward to a more comprehensive and open evaluation of all potential resource options.  This will be important to protect the long-term interest of ratepayers, and to best position this community for future economic prosperity. To that end, Lansing Can Do Better (LCDB) has proposed its Plan B as a potential alternative to the BWL's current proposal. Our approach includes a three-part strategy:

• Waiting 24 Months Before Making a Decision on New Baseload Generation
• Pursuing Aggressive Weatherization and Energy Efficiency Programs
• Deploying Renewable and Distributed Energy Resources

Waiting 24 Months Before Making a Decision on New Baseload Generation:

The most responsible next step for the Board of Water and Light is to wait at least 24 months before determining how ratepayer funds will be applied toward major capacity investments. Suspending the process for 24 months will allow for further vetting of the current proposal and will clarify a number of uncertainties that pose considerable risk to BWL ratepayers. The primary uncertainties that will be made much clearer in the next 24 months include:

•   The Future Energy Demand of General Motors
•   Federal Legislation and State Regulatory Action
•   Stability and Outlook of Financial Markets

Pursuing Aggressive Weatherization and Energy Efficiency Programs:

We must not, however, simply sit idle during this 24 month period. The deployment of significant weatherization and energy efficiency programs is crucial to meeting the future demands of the BWL consumers. We certainly applaud initial efforts by the BWL in this area. The BWL must also be cognizant of the broader national conversation, which increasingly supports the consideration of weatherization and energy efficiency as legitimate energy resources. Additionally, State and Federal programs such as Gov. Granholm's recently announced Michigan Saves plan, will allow the BWL to establish far more rigorous weatherization and energy efficiency programs than estimated within their IRP.

Deploying Renewable and Distributed Energy Resources:

Businesses and individual residents throughout the region should be given maximum opportunity to participate in the build-out of Lansing's future energy infrastructure.  To the extent they are willing to add or utilize existing renewable energy sources, BWL policies should encourage them. 

In conclusion, we think the most prudent course of action includes a strong commitment to energy efficiency and weatherization immediately, laying the foundation for a broader portfolio of renewable and distributed resources, and spending the next 24 months developing a truly comprehensive and community-based Integrated Resource Plan.  Simply conducting a quick revision of the existing BWL plan would not fully consider all potential resources. And it would not remove key economic and political uncertainties and their subsequent financial risks.