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LS suspends development of Mich. coal power plant

NEW YORK, May 1 (Reuters) - LS Power suspended the proposed 750-megawatt Mid-Michigan pulverized coal power plant in Midland, Michigan, due to economic and regulatory uncertainties, the company said in a release Friday.

The Mid-Michigan project faced many obstacles over the past year causing delays and increasing the cost and risk to continue development efforts, LS said.

“Last year’s energy legislation in Michigan restricting the available customers for the project, combined with current economic conditions and regulatory uncertainties, has deferred the immediate need for base load energy from the (Mid-Michigan) project,” said Robert Colozza, vice president for LS, in the release.

Michigan legislation last fall limited the amount of power customers can buy from competitive suppliers like LS.

Since LS is not a regulated utility it cannot recover the cost to develop and build power plants, said Joy Buchanan, a spokeswoman for Mid-Michigan, noting the company had already spent about $4 million developing the project.

Also, LS said, securing the air permit was taking longer than anticipated.

LS filed with the state Department of Environmental Quality almost two years ago and still did not have a hearing date, Buchanan said.

Moreover, in February Michigan Gov. Jennifer Granholm (D) said companies developing coal power plants had to redo their analysis on why a coal plant is better than some other type of plant.

“Given these factors, we determined it is not a wise business decision to continue active development of the (Mid-Michigan) project at this time,” Colozza said.

LS said it would continue to assess the regulatory environment and the economy in Michigan to see if it makes sense to develop Mid-American or another project in the state in the future.


The Michigan project was the third coal-fired development LS has dropped or delayed this year. The company abandoned a plan to build a 750 MW coal plant near Waterloo, Iowa, and said it was indefinitely postponing a 1,600 MW coal project in White Pine County, Nevada.

In addition to several natural gas projects under development, LS is currently moving ahead with new coal-fired plants in Texas, Arkansas and Georgia.

However, permits for the 1,200 MW Longleaf project in Georgia are being challenged in court by environmental groups.

LS has come under fire from environmental groups for its development of coal plants, which emit more carbon dioxide than other fossil-fueled plants. Carbon dioxide is a greenhouse gas linked to global warming.

Bruce Nilles, head of the Sierra Club’s efforts to stop coal power plants, hailed the LS action as a major win for his campaign.

“Michigan and the Midwest are ground zero for coal-fired power plants,” Nilles said. “The era of new coal plants is nearing the end.” (Reporting by Scott DiSavino, Eileen O’Grady and Bernie Woodall)