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Holland’s Dan Nally: Building a Power Plant Like No OtherPrint

Clean Energy | January 26, 2015 | By Jim Dulzo

*This is part 2 of a three-part update on Holland's Community Energy Plan. Read part 1 here, and part 3 here.

Dan Nally, left, leads the Holland Board of Public Works’ unique, 114-megawatt gas plant project, working from the last house standing on the site, which was marred by abandoned buildings and junk piles. Chris Van Dokkumburg, right, HBPW’s planning analysts, is part of the project team.
Dan Nally, left, leads the Holland Board of Public Works’ unique, 140-megawatt gas plant project, working from the last house standing on the site, which was marred by abandoned buildings and junk piles. Chris Van Dokkumburg, right, HBPW’s planning analysts, is part of the project team.

HOLLAND, Mich.—When it comes to building power plants, Dan Nally has been around the block, the state, and the planet a few times.

Now this 35-year veteran of the power industry—largely for Consumers Energy and its parent company, CMS—has himself a doozy of an assignment: project director for construction of the Holland Board of Public Works' new gas-fired power plant.

Given its unique, community-influenced look, setting, and functionality, he views his close involvement in what’s dubbed the Holland Energy Park as a fine career capper—made all the sweeter by Monday’s announcement that he is now a finalist for the Grand Rapids Business Journal’s Newsmaker of the Year award.

“This has been an outstanding opportunity for our community to do something important, and do it the right way every step of the way,” Nally, who turns 61 in March, said when told of his finalist status. “I’m proud to be a part of what our community is doing.” 

The facility Nally is helping to birth will likely be unlike any other fossil-fueled generation station in the country, thanks to the blue-ribbon panel of local leaders who helped determine what the plant would look like from the outside, and to what the town’s forward-looking, 40-year Community Energy Plan says about how it should operate on the inside.

On the outside, the approximately 140-megawatt plant’s surroundings will, in fact, look like a park: fenceless, with fetching trails, gardens, mature trees, reflecting ponds, restored native species and refreshed wetlands. It will be a far cry from the previous scenery—junk piles, worn-out houses and abandoned commercial buildings.

Nally’s finale will bring the city a new, attractive eastern gateway, replacing a longtime eyesore with painstakingly restored, attractive grounds framing a building quite unlike the hulking, gray boxes he used to help build. According to the architectural sketches, this one will have lots of big windows, a few curving lines, and walls of mild-mannered earth tones and look-at-me, bold orange.

A blue ribbon citizens committee came up with an unusually attractive design for Holland’s new, 140-megawatt gas plant, which will sit within a 26-acre city park.

The plant’s innards will be mostly conventional, but will include an energy education center. Two gas turbines will produce less than half the climate-disrupting greenhouse gases of the old coal-burners they’re replacing, and without the sulfur dioxide and mercury that increase coal’s notoriety.

There’s even an unusual energy bonus: The combined cycle turbines’ waste heat will not only drive another, steam-powered turbine that also makes electricity, it will produce copious amounts of hot water, piped to what will likely be Holland’s expanded snowmelt district. Along the way, it may heat several buildings, allowing them to turn down or shut off their own fuel-burning boilers, before cycling back to the power plant.

Nally, HBPW’s business services director, had a front-row seat for the battle between his company and citizen groups trying to stop construction of the new coal plant his company originally intended to build. He knows that even this new, carefully thought-out plant was not without controversy concerning its size and fuel source.

But as someone who saw dozens of far more polluting, less efficient, conventional plants take shape around the globe—and how the new Holland plant fits into his community’s 40-year energy strategy—he sees just how unique the new facility will be.

Nally’s electrifying career began after earning a business and computing degree at Aquinas College. He was hired at Consumers’ Palisades nuclear plant as a radiation safety technician, but after the partial nuclear meltdown at Three Mile Island, he moved to Consumers’ J.H. Campbell coal plant complex.

“I was concerned about the viability of the nuclear industry and whether I would still have a career, so I took the opportunity,” he said.

After 11 years, he moved to one of Consumers’ corporate cousins, CMS Enterprises, which built “merchant” power plants—generators not owned by utilities.

At first the projects were domestic—from Maine to California—and mostly biomass-based. Eventually he joined CMS’ international team, working on, among others, a 600-megawatt coal plant in Morocco, a petroleum plant in Ghana, a natural gas unit in Saudi Arabia, and a lignite plant in India. But the traveling wore him down.

“It’s a 30-hour plane flight to South India,” he observed. With CMS dropping merchant plant development, it was time to find something closer to home. He joined HBPW in 2007.

Recently, on a cold, occasionally snowy day, Nally climbed into “the Alligator,” a low-slung, big-wheeled tractor with a glass-enclosed cab, to conduct a tour of the newly cleared, 26-acre energy park site and to talk about the project, which breaks ground next month.

As the Alligator roared and crawled around the plowed, muddy, sometime precarious ground, he talked about his industry, his community, and what it takes these days to do the right thing.

Michigan Land Use Institute: How is working for a municipal utility different from working for a commercial utility?

Dan Nally: One thing is that we have a diverse, multi-faceted mission. It’s not just about providing power, or water, or wastewater services. We are an integral part of the community, and how we impact it from a visual or business standpoint matters. Chicago Drive is the eastern gateway to Holland, and its condition has been a quandary for the township and city. They didn’t know what to do with it.

When we talked to Holland Charter Township and the city about building a plant there, they were pleased. And as we looked, we saw an opportunity to not only use it as a power project, but to revitalize our eastern entrance.

That’s what our city council wants, that’s what our board said is the right thing to do, so we are doing some urban renewal.

MLUI: Do you think an investor-owned utility would ever do a project like this?

Nally: I don’t know. There may be some investor-owned utilities that would do that as a philanthropic effort, but we’re not doing it just because it’s nice. We are part of the community and this is the right thing to do for the long-term benefit of Holland and this area.

MLUI: It seems like you are having a pretty good time.

Nally: I’ve really enjoyed it. It’s more than just building a building that makes power. It is a very big infrastructure project for Holland, the largest ever done—$200-plus million and two-and-a-half or three years. When we get done it will be an entirely different visual for Holland, let alone providing power from a facility twice as efficient as our old plant. Our snowmelt system will have four to five times available hot water: We were maxed out and couldn’t put any more snowmelt in our streets. Now we can.

It also gives us the opportunity to explore district heating and cooling by using that same water. So, it’s a power plant, but it’s also, by the way, a snowmelt heat provider. And, oh by the way, it has the ability to supply steam to Hope College. And it’s a community park.

So it’s not just your vanilla power plant. It’s a little bit tutti frutti. I’ve really enjoyed that aspect of it.

MLUI: Have you run into many difficulties with such an unusual approach?

Nally: Has it been frustrating and complex? You bet. When you do something like this, building consensus is huge. It’s gotta happen.

So we’ve had a very public process on all of this with our Community Energy Plan, our Sustainable Return on Investment analysis. Even how the site is laid out and looks went to a blue ribbon panel of city council folks, planners, business people, environmentally oriented people. They came up with the site layout; they came up with how the building’s going to look. Not just, you know, the utility saying we are going to build a power plant, here is where it’s going to be and, by the way, it’s gonna be a big box.

There are costs associated with doing it this way. The architectural look is going to make a statement. And that’s great, because we have a lot of buildings in Holland that do that: Hayworth World Headquarters, Herman Miller, Hope College, and the new CityVu Bistro and CityFlats hotel. This will be in that class.

MLUI: Aren’t people concerned about the extra cost?

Nally: We see very strong support. People come in and want to see the plans and say we are doing the right thing. Yes, it adds to the cost but there’s been that kind of support. To me that is very neat.

MLUI: Talk about how you ended up with a gas, not a coal plant.

Nally:  We were originally looking at building a solid fuel plant down at the water, and that was very controversial—a lot of heated discussions publicly. There were lawsuits, four years of trying to get an air permit. We finally had to sue Granholm and the Michigan Department of Environmental Quality to get it.

Well, sometimes, if you have to work so hard at something, it’s probably not the right thing to be doing. There’s a reason when it is that hard. After four years of looking at what originally made sense as a $150 million project, it had become a $330 million project. That dog didn’t hunt

So we go through the CEP and the SROI and the blue ribbon panel and come up with this project. We submit an air permit application in July, don’t receive one comment, nobody requests a public hearing, so we didn’t have one, and by Thanksgiving we have an air permit. Five months, and $200 million, not 330. And 140 megawatts, not 80.

So it’s one of those things that, as you go through the process and things just seem to click, there’s a reason. I believe in divine intervention, I believe that when things are going terribly hard you might want to reassess what you are doing.

I won’t say things have been terribly easy, but they have been smooth and doable. So maybe we are on the right path; maybe we are doing the right thing.

MLUI: How do you think things are going with the Community Energy Plan?

Nally:  We are starting to get momentum. We’ve had a core of dedicated people work on it for many years, but it’s starting to get out there. More people are engaging; they are looking at the building efficiency labeling, the district heating—we’re getting more questions on that.

Certainly the power project was a key piece—there’s all kinds of interest in that. We’ve worked hard to get on-bill financing for the home efficiency retrofit piece. So the train is out of the station and is moving.

Like any project, it is that initial push to get things rolling that is hard. We’ve broken that inertia and we are moving forward. I think we are in a good place, I really do.

MLUI: Given your background in the utility industry, have you been skeptical about any of the things you see going on with the CEP? Any lessons learned?

Nally: I had a certain amount of skepticism on certain things. But I always say you should question the viability of what you are doing. You should always go back to that: Are you really doing the right thing? Don’t lose sight of the goal. I think we are in a good spot.

MLUI: Do you think what is going on in Holland now can have much effect elsewhere?

Nally: Well, we’ve got an excellent chance of prevailing in the Georgetown Energy Prize Competition, and I think that would add more noise to what we are doing.

Our people who go to America Public Power Association meetings get a lot of questions about Holland. They say, ‘Wow! I’m seeing this and that on your website—how are you doing that? How did you come up with that?’ So it is getting some buzz in the public power industry. That is neat.

I’ve had people call from Colorado and Niagara, Ontario, asking about our SROI or CEP process. So I think other entities are taking a similar approach and understanding the value of taking that approach. You’ve got to have a plan.

And I think, more importantly, you’ve got to have consensus. The time of making decisions in a vacuum for a public entity was gone some time ago, but it is really gone now. So making sure those voices are heard and you take into account those desires—you have to do it!

Jim Dulzo is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at jimdulzo@mlui.org.