Michigan governor signs energy package

By Bernie Woodall

LOS ANGELES (Reuters) - Michigan Gov. Jennifer M. Granholm on Monday signed into law legislation that calls for 10 percent of electricity in the state to be generated from renewable sources by 2015.

Just over half the 50 U.S. states have set requirements for renewable power generation.

Also signed into law is a Michigan provision requiring energy efficiency to cut power demand by 5.5 percent by 2015.

A third provision signed by Granholm limits switching by industrial customers from Michigan utilities. This amendment to existing law is seen as helping Consumers Energy build a new coal power plant and for Detroit Edison to build a new nuclear plant by assuring them of an adequate customer base to support the major capital projects.

Granholm made creation of a renewable portfolio standard part of her annual state address this year. The governor has said she would like Michigan to make 25 percent of its power from renewable sources like wind and solar by 2025, but that was not part of the legislation signed on Monday.

"The main focus for us is jobs," said Liz Boyd of Granholm's office. "(Renewable energy) was and is critical to transforming our economy and creating jobs."

Granholm claimed that renewable energy methods will save more money than they cost.

"The most expensive thing we could do was to do nothing," said Boyd. 

The governor said Michigan can create more than 60,000 jobs by investing in solar, wind, biofuels and energy efficiency, citing the Center for American Progress.

NEW COAL, NUCLEAR PLANTS

The energy package amends Michigan's electricity customer choice law so that no more than 10 percent of a utility's load can be transferred to another power retailer. This amends the late-1990s deregulatory measure allowing customer choice.

So far, only industrial customers have been affected by customer choice in Michigan.

Consumers Energy, principal subsidiary of CMS Energy, wanted the amendment to assure it will have enough customers to support the $2.3 billion, 800-megawatt coal-fired power plant it plans at the existing Karn-Weadock power station near Bay City.

Karn-Weadock has six units now, four of them coal-fired and two that use a mix of oil and natural gas.

Kelly Farr, Consumers Energy spokesman, said the new plant will burn coal more efficiently than contemporary coal plants. Consumers Energy hopes to begin construction in 2010 and bring it on-line in 2015.

That is contingent on issuance of an air permit from state regulators who have yet to rule on an application that was filed last October, said Farr.

Detroit Edison last month submitted a license with federal regulators for a new nuclear power reactor that may be built at its exiting Fermi plant between Detroit and Toledo, Ohio. 

The company estimates the cost of the new reactor to be near $10 billion and it would open about 2020.

(Editing by Christian Wiessner)