September 13, 2012

New Analysis Shows Detroit Edison and Consumers Energy Spent More Than $1 Billion in 2010 to Import Coal

November Ballot Initiative Would Keep Money in State, Boost Local Economy

(CHICAGO) September 13, 2012 – Detroit Edison and Consumers Energy, the largest utilities in Michigan, sent more than $1 billion out of state to import coal in 2010, creating a drain on the state economy, according to a Union of Concerned Scientists (UCS) report released today.

The analysis looked at coal imports in 2010, the most recent year for which data was available. The study found Detroit Edison, the state’s largest electricity provider, spent $615 million, with imported coal making up 77 percent of the utility’s power supply. Consumers Energy, the state’s second largest electricity provider, spent $441 million, with imported coal making up half of its power supply. (For utility service area, go to: http://www.dleg.state.mi.us/cgi-bin/mpsc/electric-gas-list.cgi?townsearch=s*.)

“Detroit Edison and Consumers Energy imported every speck of coal they used,” said Jeff Deyette, report author and senior analyst at UCS. “Coal prices have gone up about 81 percent over the last decade and that entire increase was passed onto ratepayers. If the utilities had instead invested in homegrown, renewable resources to produce electricity, like wind, solar and biopower, more of that money could have stayed in the local economy.”

A number of studies by UCS and others have shown that ramping up renewable energy development and implementing efficiency measures creates local jobs, lowers utility bills, boosts local tax revenues, and generates additional income for farmers and rural landowners. A study released in February by the Michigan Public Service Commission found that the state’s current 10 percent renewable energy standard is supporting new jobs and economic growth without impacting electricity prices. A more recent study by Michigan State University researchers on the 25 percent renewable energy ballot initiative before voters this November found the proposal could deliver up to $10 billion in new clean energy investments and thousands of jobs.

“Relying on homegrown, local resources -- rather than imported coal -- to generate electricity would help expand local businesses by keeping the money circulating here in Michigan,” said Liesl Clark, co-founder of 5 Lakes Energy and member of the Business Leadership Group – a coalition of more than 250 Michigan businesses and organizations supporting the renewable energy ballot initiative. “We can generate energy and put people to work by using Michigan engineered, manufactured, and built machines,” said Clark, who joined UCS on a telephone press conference to release the report.

According to the UCS analysis, most of the coal that Detroit Edison and Consumers Energy imported came from mines in Wyoming and West Virginia. Detroit Edison also imported coal from Kentucky. The utility’s Monroe facility is the most import-dependent power facility in Michigan, having spent $423 million in 2010 to purchase out-of-state coal. Consumer Energy’s J.H. Campbell power plant is the state’s second most import-dependent power plant, having spent $199 million.

Michigan’s power producers combined spent about $1.3 billion dollars on out-of-state coal in 2010.

“The question for voters this November is:  Do we keep our dollars at home to help our economy or continue to send them out of state?” said Steve Frenkel, director of UCS’s Midwest office. “If voters decide to increase the renewable energy standard, it could keep as much as $2 billion in state by 2025.”

According to the UCS analysis, if the ballot initiative passes, Detroit Edison could avoid as much as $866 million dollars in out-of-state coal purchases between 2016 and 2025 and Consumers Energy could avoid more than $1 billion.

Utilities also should invest in energy efficiency to wean themselves off imported coal and boost the local economy, according to the UCS report. Michigan’s 2008 requirement on utilities to reduce energy consumption resulted in $554 million in avoided energy costs in 2010 alone, a savings of $4.88 for every dollar invested in energy efficient technologies.

 

The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.