Holland Board of Public Works manager Dave Koster urged city council to approve a $187 million, 114 megawatt, natural gas-fired power plant. (Photo: Jim Dulzo/MLUI)

In an historic vote, the Holland City Council has pre-empted longstanding plans to build a highly controversial coal plant in the city and, instead, approved a natural gas-fired power plant that will likely provide more power than the town actually needs.

The proposal passed 8 to 1. It calls for building a 114-megawatt generator well away from the city’s coal-fired James DeYoung complex on Lake Macatawa; closing the largest of the complex’s coal-fired units; and converting two others to quick acting, gas-fired generators ready to supply “peak” power on hot days.

The Dec. 5 decision comes six weeks after the council approved contracts with two wind farms that will deliver 32 MW of electricity to the city over the next decade.

Both decisions follow the broad outlines of Holland’s Community Energy Plan, submitted to the council a year ago. And while the council has not formally endorsed the CEP, it has appointed five task forces to work on “scale projects” that mirror the plan’s original, recommended first steps. Four groups made initial reports to council in October.

However, the approval of the gas plant, which will produce about half the climate-changing emissions and far fewer health-harming gases than a similar-size coal plant, displeased some local residents along with Sierra Club and Clean Water Action representatives. They said the decision was occurring too quickly and would produce an oversized plant that did not take into account the CEP’s plan to drastically lower demand for electricity over the next 40 years.

Several gas plant opponents also warned against the environmental dangers of natural gas fracking and the risk of highly volatile natural gas prices. They said the enterprise would sharply boost electric rates if the Holland Board of Public Works can’t sell enough excess power to other utilities.

But HBPW General Manager Dave Koster said that the plant would be only 14 percent larger than the two, separate, gas-fired units the CEP suggested. He added that the larger plant would bring extra revenue to the city and displace dirtier, coal-fired electricity while producing fewer emissions, operating far more efficiently, and costing less than the CEP’s two-plant solution.

Tough Call

Holland resident Don Triezenberg, vice-chair of the citizen committee that commissioned and managed the CEP process, admitted that the vote was a tough call; he told the council that a yes vote made sense if they stuck to the CEP’s basics.

“As good as this is, it is not the best possible solution,” he said of the large plant. “But because this comes in the context of the CEP, I say vote ‘yes.’ The key is keeping the commitment to energy efficiency investments, both in generation and end [customer] use.”

The CEP, unveiled in September 2011, calls for cutting electricity and heating gas use in every building in Holland by between 30 and 66 percent by 2050, with the gradual addition of natural gas-, wind-, solar-, and landfill gas-fueled power.

That would make the city a leader in efficiency and renewable energy and, proponents say, highly attractive to businesses. It would also buttress efforts to raise Michigan’s utility efficiency mandates from 1 percent to 2 percent annually, according to efficiency advocates. Gov. Rick Snyder said recently that he’s open to discussing state efficiency standards next year.

But Triezenberg focused on the immediate and long-term local effects of financing a gas plant that could produce very high electric bills.

“It does start a $200 million investment in generation that will boost rates by 20 percent,” he said of the new plant. “Will you support similar investments in our residents’ and businesses’ energy efficiency? We have to make sure we prevent power bills from exploding. User efficiency is just as important as building the plant.”

Interviews with several observers and the one councilperson who voted against the plant, At-Large Councilman Wayne Klomperens, indicated that, in council’s eyes, its appointment of the task forces amounted to a strong endorsement of CEP.

Right Direction

The CEP called for “scale projects” that would begin work in five areas. Those include providing electricity, heat and other industrial services within Holland’s industrial park; a pilot single-family home efficiency retrofit project; distributing heat to nearby neighborhoods from boilers operated for Hope College and Holland’s high school, hospital, and aquatic center; and expanding the city’s current “snowmelt district” sidewalk heating to the downtown and its buildings, by using waste heat from nearby, existing boilers.

City council responded in July by approving four slightly different task forces to work on home energy retrofits; citywide district heating and cooling; building efficiency labeling (similar to vehicular gas mileage ratings); and community education and outreach. In December, the city added a fifth group to work on commercial and institutional efficiency.

Councilman Klomperans said that he’s optimistic the CEP will accomplish good things.

“I think we are going in the right direction,” he said a few days after the vote. “Other than the size of the plant, I feel pretty good about where we are going.”

Efficient Homes and District Heating

The first four CEP task forces filed their initial reports with the city council in October.

The Home Energy Retrofit Task Force proposed a pilot project to analyze the efficiency of 90 Holland homes by July 2013, and then retrofitting them with aggressive efficiency measures during the following 12 months. The task force did not establish efficiency goals.

Instead, the project would use the pilot to determine how best to design a program so all of Holland’s 7,000 single-family homes can afford to take prompt action after their energy analyses.

“We need to ensure all components are in place to take a homeowner from audit to retrofit to performance metrics, including project financing,” the memo said, “so there is not an action gap created where the homeowner has the desire, but not the mechanism, to retrofit her home. In fact, without a sustainable financing model and without a quality, simple, streamlined process, there simply won’t be much uptake of the retrofit program.” (Emphasis in original.)

The District Heating and Cooling Task Force looked at available waste heat, heating and cooling demand, and a possible layout for additional hot water pipes in Holland. The task force’s initial report found the downtown and nearby areas could benefit from district heating and that the college, hospital, and several public buildings could provide waste heat for certain kinds of district-wide systems.

Building Labeling and Public Education

The Building Energy Labeling Task Force considered two approaches to its communitywide project. Members explored whether to use broad, readily available statistics to create a general picture, or actual building-by-building analyses. They chose the latter.

“Holland should adapt, encourage, promote, and incentivize an existing, robust and voluntary labeling program,” according to the task force. “The program should be tied to the retrofit program as the first step in identifying potential energy-reducing projects that will be easy to implement and provide the quickest payback.”

The task force also compiled several examples of established label designs and a list of possible financing options.

The Community Education and Outreach Task Force suggested a communitywide energy survey, ward meetings to present results to residents, and a budget—largely for communications—to keep Holland informed and educated on the economic opportunities energy efficiency will bring to residents, businesses, and the larger community.

“We believe some very good and thoughtful questions should be included with regard to energy use,” local business owner and outreach committee member Paul Lilly told The Grand Rapids Press. “The community needs to be engaged in this if we’re going to be successful.”

In total, city council allocated $55,000 to launch three of these planning projects; HBPW will finance the district heating engineering study, which it expects will cost about twice that. Council has not yet set a budget for the commercial and institutional group.

According to Mr. Triezenberg, who is also part of the home efficiency group, all of the groups will be making firm recommendations to the city council within the next few months.

Meanwhile he, too, sounds confident about the future of Holland’s energy plan.

“I am pleased that the new power generation plan will increase our overall efficiency at the generation end from about 30 to 35 percent at [the current coal plant] now to about 60 to 70 percent at the new plant in a few years,” he said.

Triezenberg added that the plant would work well, “taking into account higher innate efficiencies in [the new gas plant] compared to coal, capturing waste heat for more snowmelt, and a whole new district heating program that will eventually reduce or eliminate the need to burn any other fuel for heat and hot water in buildings throughout Holland.”

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