GHBLP Power Supply Plan
The Board of Light and Power (the BLP) is the municipally-owned electric utility of Grand Haven. Our utility system was created in 1896, 122 years ago, and has evolved over the years to meet the electrical needs and expectations of Grand Haven, Ferrysburg, and portions of the surrounding Townships. We now serve approximately 14,000 customers in the tri-cities area (about 12,250 residential customers and 1,750 commercial, industrial and municipal customers).
Throughout our history, the BLP has locally generated most of the electricity we distribute to our customers. Since 1961, this power has largely come from the Sims Power Plant on Harbor Island – first, from Units I and II, and since 1983, primarily from Unit III. Units I and II were retired in 1986.
The J.B. Sims Generating Station is a coal fired steam-generating plant with a net capacity of approximately 70 MW. Sims III is equipped with air emission control technologies and meets all applicable environmental regulations.
The BLP’s Diesel Plant now houses only one operating diesel engine (more specifically a Reciprocating Internal Combustion Engine or RICE) with a net generating capacity of approximately 6.5 MW. All other diesel engines at this site have been retired. The remaining operable engine is normally in a stand-by condition and is only called upon during peak hours when demand for electricity is the highest or during emergencies when normal supply is limited for some reason. This engine is primarily fueled with natural gas. A small amount of fuel oil is used as a “pilot” fuel. This engine also meets all applicable air emission regulations.
The Sims power plant is now scheduled to close on June 1, 2020. The last remaining operable generating unit at our diesel plant on Harbor Drive will also be retired on this date.
We at the BLP believe the closure of these facilities presents the greater tri-cities community a once in a generation opportunity to move away from our reliance on a single, now relatively expensive and undependable, carbon intensive power plant and replace it with a more diverse, less costly, more reliable and sustainable power supply portfolio.
In November 2018, the Board of Light & Power hosted five public forums with the community’s decision makers, business leaders, and the general public, where the national engineering firm, Burns & McDonnell, presented us with several alternate paths to achieve the objectives the Board established and approved in its five-year strategic plan in April 2016 - to transition away from Sims to a future where we can utilize a more sustainable, economical, and diversified power supply portfolio.
First, Burns & McDonnell agreed with the recommendations of the BLP staff, and two other respected national engineering firms who had previously studied our situation over the last six years. Their conclusions and recommendations: Sims will reach the end of its economically useful life in June of 2020 and should be retired. The plant cannot run past this date safely, dependably, efficiently or cost effectively and there are less costly, more reliable, and more sustainable power supply resources available to us.
Burns & McDonnell additionally evaluated two other paths forward: one where the BLP purchases a diversified mix of power options entirely from others to meet all BLP system needs and a second where we buy power from others but also supplement and complement these diversified purchases with a local, more flexible, modern, natural-gas fired generating plant, about one-half the capacity of Sims.
The community was presented additional information as well during the forums. The BLP will continue, after Sims is retired, to buy its deficient capacity requirements and energy needs from and through the Michigan Public Power Agency (MPPA), a joint action agency of 22 Michigan municipal electric utilities who have over the years worked together to take advantage of economies of scale in the power supply marketplace to their mutual best interests. MPPA’s CEO attended one forum presenting MPPA’s proven track record in assisting their members in successfully navigating these complex commodity transactions. Under contracts that have been in place for many years, the BLP buys all its power from MPPA. MPPA is the “market participant” in the regional network under the control of the Midcontinent Independent System Operator. As such, MPPA is the responsible party, negotiating and completing the transactions on its members’ behalf.
Representatives of Wolverine Power Supply Cooperative and ITC, the lower peninsula’s two primary high-voltage transmission system owners and operators, were also at the forums and explained their efforts to maintain and improve Michigan’s reliable, resilient, and robust electric grid. As you may know, the BLP is amid constructing significant transmission system improvements of its own. When these local improvements are completed and the BLP upgrades its transmission service level to the network integrated status, its power supply reliability will improve substantially, even with the closure of the Sims power plant.
The new natural gas fired power plant being proposed would be constructed within the same footprint of Sims; however, the smaller plant will occupy significantly less of the site. Although the site reuse plan has yet to be fully developed, it is anticipated that increased public access to the Grand River and Linear Park, mitigated wetlands, and potentially a community solar power “garden” may be incorporated into the site redesign and remediation plan.
Finally, the new generation facility will be designed to house the heat source for the downtown snowmelt system. Although we do not know exactly the best configuration to do so, the BLP is committed to continue to supply heat, and incorporate the needed equipment to do so into the plant’s design.
The Board of Light and Power, at its November 2018 meeting, approved Burns & McDonnell moving forward to complete the next phase of engineering study on the proposed local power plant though the completion of a “Project Definition Report.” These efforts will answer more of the community’s questions brought up during our public forums and provide a further look at the design of the plant, and its future operation, in more detail.
The Board of Light & Power has systematically conducted a very thorough public and transparent review to consider Sims closure and its future power and energy supply options. We now as a community need to come together behind this local generation option and recommendation, or by default, the BLP will be required to proceed down the alternative path of purchasing all our system capacity requirements and energy needs. Although this default path presents the lowest cost option in the Burns & McDonnell study, we at the Board of Light & Power do not believe it is the “best” option for meeting our community’s electric and energy needs into the future. We ask you to join us in supporting these efforts. We are, after all, your community-owned electric utility, and are working, like we have for the last 122 years, to meet our community’s expectations for quality local electric utility service that returns value to our customers and the community as a whole.