Rogers City Coal: Malfeasance?

May 26, 2010 | |

The pushback against new, coal-fired power plants is world wide, stretching from Rogers City to Java’s south coast.

Air permit denied!

I had long thought that when I finally read those words I would be filled with happiness and joy. The reality was that I cried.

And then I got really angry.  

Wolverine Power Supply Cooperative’s air permit for its proposed coal plant in Rogers City was denied by the State of Michigan because, according to the state’s letter, the plant simply was not needed, there were cheaper options, and the power it generated would be extremely expensive.

But I already knew this; the information was almost three years old to me.

That is because I had the opportunity to work with Tom Sanzillo, of T.R. Rose & Associates, in New York City, on a financial analysis of this proposal. Tom, who is a municipal financing and bonding expert, said electricity from the new plant would cost 17 to 19 cents a kilowatt-hour to members of the co-ops that get their juice from Wolverine-Cherryland Electric Cooperative, Presque Isle Electric & Gas Co-op, Great Lakes Energy, and HomeWorks Tri-County Electric Cooperative.

Turns out his analysis was, as he insisted at the time, a little conservative: The state’s estimate came in at 20.7 cents. The average ratepayer would see a $70 jump in his monthly electric bill.

The crime is that Wolverine also knew this; so did all of the board of directors. Why do I know that? Well, we hand-delivered the Sanzillo analysis to them in late 2007. They never responded-not even a peep. It was if the report had never existed.

Now, today, they’re disputing the state’s figure, but still haven’t pointed out any flaws in the regulators’ math, thinking, or assumptions.

So, not only is the permit denied, but now we also have proof of what can only be called financial malfeasance. Those who sit on the co-op boards (the four co-ops each have a representative on the Wolverine board and, supposedly, are there to govern the company) are responsible for wasting $23 million dollars of members’ money trying to plan, promote, and gain approval for this expensive, dirty, just plain foolish proposal.

Those directors have some more explaining to do beyond that: They better come up with an explanation for what’s happened to the rest of the $73 million that the cowboys at Wolverine snatched from co-op members over the last five years, a few dollars every month, to fund their coal plant play time.

Twenty-three million dollars! $73 million! What would that have done to local economies if kept in our northern Michigan economy? How much closer would we be in northern and west-central Michigan, Wolverine’s service area, to creating thousands of jobs in clean energy?

And how much closer would Rogers City be to a new, clean economy if they hadn’t tied their future to a bad coal dream four years ago?

It’s all very sad. And people should be held accountable. Co-op members should demand their money back from Wolverine, and start electing new directors to get the Michigan utility co-op world back on track.

Healing can start now.

Tom Karas founded Michigan Energy Alternatives Project and Reach him at [email protected].


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