From “I Heart Coal” to Solar Leader

May 14, 2019

For those that have been paying attention, the metamorphosis of big, coal- heavy midwest utilities over the last half decade has been head-spinning and jaw-dropping.
Example, Michigan’s largest utility has moved from a knuckle and foot-dragging troglodyte among utilities, to a leader in retiring coal plants, and adopting renewables, with a goal of no more coal and 80 percent carbon cuts as of 2040.

Not fast enough, yet, mind you – but pace of change in the last few years make it seem quite likely that the transformation will continue to pick up speed. Historically, when cities, countries, or companies set renewable energy goals for themselves, they meet with greater success, more quickly, and more cheaply, than anyone imagined…

Jeff Smith for Groundwork:

Patti Poppe (above) accepted her position as CEO of Consumers Energy in July 2016, and by February 2018 she had ushered through a corporate goal of stopping the burning of coal by 2040 and reducing carbon emissions by 80% in that same time. The initiative at a Top 20 utility earned headlines nationwide and positioned both Consumers Energy and Poppe as national leaders in the fight to slow global warming. 

Word is you used to have an “I heart coal” bumper sticker on your car. But then you led one of the nation’s largest utilities to a zero coal future. What drove that remarkable change?

Figure from Consumer Energy Integrated Resource plan, showing replacement of coal primarily with solar energy

Yes, that’s true. I was proud of our coal plants that powered Michigan. But when I came to understand the science of climate change, I knew we had to do something different. And we did a lot of homework to figure out what we had to do. There was a time in our company when there was a lot of denial about climate change. Many people here said climate change was alarmist and they didn’t believe it. And I can say that at first I did not do my homework either. 

What happened to bring about that change?

We did a forum where we brought in opposing viewpoints with supporting information. Because what you really see is that people on both sides do not really have a good scientific basis for what they think about this. When you ask people why they think climate change is real, they say, “Because I believe it.” And when you ask people who doubt climate change, they say, “Because it’s alarmist.” So we had people come in and I did my homework and I learned the science and it became clear that we could be part of the solution to reducing carbon emissions. It was a no-regrets move. And that is especially true if we can do it in a way that does not economically harm customers. Also, within the company, some people retired and new people came onto the team who had different points of view.

It seems the one thing you always hear from people who deny human-caused climate change is that Earth has always gone through transitions, and today’s warming is just one more transition.

It’s true, Earth has gone through transitions, the climate is always changing, but when you look at the carbon charts based on the ice cores and at the ocean acidification charts, it’s hard to deny the impact of carbon. But the thing is you have to look at them.

How difficult was it, given the emotional culture of Consumers Energy at the time, to get consensus around the zero-coal goal?

It was very interesting. With the new voices in the conversation, it was actually not difficult. People were open minded, and when you see all sides of the discussion, you can have consensus. We wanted to stand for leaving a lasting legacy that we could all feel proud of. As a team, that legacy is based on the triple bottom line: people, planet and prosperity. This transition can work for all three. When we closed our seven coal plants, we cared for the people at those facilities. We also cared for the communities where the plants were, by making sure we sold the sites to developers known for creating new economic value. We did not say, “Sorry, Muskegon, we will leave you with a giant hulk of an empty coal plant.”

Closing seven coal plants. That means something in America today.

Yes, it was very significant. That was more coal plants retired than by any investor-owned utility in the nation. Newsweek named us one of the top 10 greenest companies in the nation—not just top 10 utilities, but of all companies. Stopping coal has many other environmental effects too. It reduces water use. Reduces waste to landfills. Reduces carbon, of course. So that was step one. Step two was making an ambitious goal for elimination of coal. We set 2040, which is a decade earlier than the Paris climate agreement. And the third step was the integrated energy plan. We have to file that plan with the Michigan Public Service Commission.

This change represents such a whole new way of thinking, I’m wondering how it has affected the culture of the company. Does it just plain feel different at Consumers today?

That’s funny. Nobody ever asks me that, but yes. It does. It feels much more entrepreneurial. More inspired. In fact, some of our newest employees came to Consumers specifically because of the commitments we have made. And some people who have been working at the company for a long time are so proud of the company for taking this stance. I don’t mean just senior management. The purpose-driven culture gives extremely high leverage. People are really enthusiastic about being part of this team.

Here are two examples. We have two pilot projects in the state. One is in Grand Rapids, on the west side, and we worked with developers to create a block that demonstrates the newest energy technologies. We are putting in a new facility there, and that becomes an attraction for future employees to come work there. It’s a cool neighborhood, so you can live near your office and walk to work. And in Jackson, we announced a smart energy district, a block of downtown where we’ll be taking the clean energy goals and accelerating them in this clean energy district. There will be a public library, hotel, multi-use with residential up and retail down. Solar on the rooftops. Battery storage. It will be a microcosm of this new universe where we can demonstrate clean energy.

What did you hear from other utility CEOs when you made your coal-free announcement?

I would say about two-thirds of them said, “Good job.” And another one-third don’t have faith in new technologies and have doubts about renewables’ ability to cover base load power and about the ability to optimize energy. But two-thirds are making moves similar to what Consumers did. This point about renewables being economical, that the customer doesn’t have to trade-off anymore—the economic models are on the side of the planet now. Even if you don’t care one whiff about the planet, you still make the change based on the economics. It’s too late to save coal. You can’t save coal. The economics won’t allow it.

Even just considering the waste associated with using coal. The waste at the mine. The waste getting it onto a train. The train traveling. Processing it for fuel at the plant before you can even burn it. Versus … the sun! Coal just doesn’t make sense anymore. And that helps even the old school folks come around the corner.

Even when you know you are doing the right thing, I’m guessing the human side of closing plants makes it a bittersweet thing.

Most utilities around the nation have an aging workforce. When we were closing our seven plants, I went to one when it was the last day of operating. I went to the control room. It was very emotional because there were 75 people in the room, and I asked how many of them were retiring tomorrow. And about half raised their hands. Many delayed their retirement to fulfill their duty to that plant. The other half had new jobs in the company. That plant had provided power to Michigan for 75 years. There was not a dry eye in that room. When I went to the plant, I didn’t know what to expect. Would there be picketing? Would everybody be mad at me? But I said it is our obligation to bring energy in the cleanest form possible. They nodded. They got it.

10 Responses to “From “I Heart Coal” to Solar Leader”

  1. Don Osborn Says:

    WOW!! The answer to that first question really says it all. Plus I like the point that this is not the end game but a real start.

    • greenman3610 Says:

      matter of fact acknowledgement that they were ignorant. Frustrating and infuriating, but I guess that’s where we start.

  2. mboli Says:

    eGrid 2018 summary tables (they are 2016 data) show that subregion RFCM:

    — produces 1272 lb/MWh of CO2. The US average is 998, the worst subregion is 1613.

    –generates 41.5% of its electricity from coal, the national average is 30.4%. The worst subregion is 71%

    eGrid comes out every two years roughly. So about a year from now we should be able to see 2018

  3. redskylite Says:

    Talking of transformations way to go Massachusetts . .

    “Developing a landing point for 1200 MW of offshore wind at the site of a former coal plant physically and symbolically represents the transformation from fossil fuels to wind. While the South Coast has lost a coal plant, it’s quickly becoming the nexus of a new clean energy economy and emerging as one of the great energy stories in the world. This agreement is a symbol of the change that’s coming – and it promises to be a very powerful economic driver in the region.”

  4. Keith McClary Says:

    Today’s “Looks Good on Paper” by Dan Collins:

  5. jimbills Says:

    I read the plan. Phasing out coal (mostly, see below) – great! Increasing solar by a lot – great!

    But they’re using some trickery here. Solar/wind directly from CMS won’t be replacing a lot of that coal use. They’re going to have ‘Market Purchases’ make up a large bulk – or buying electricity from other sources, which will rely on whether or not those sources are clean or dirty.

    They’ll keep all almost all their current coal until 2030, they’ll ramp up NG by 50% from now to 2030, then cut (most, see below) of the coal and half the NG from 2030 to 2040, replacing the bulk of it during that time with market purchases.

    They plan to be 43% total renewable in 2040 – and some of that 43% might also be purchased power. 41% of their total sources will be market purchases.

    It’s on page 4 of the PDF linked above. They currently plan for a lot of those market purchases to be from FF sources, including coal (bottom of page 4). Their largest coal plant (roughly 50% of their current total) will be retired in 2039/2040 (page 5).

    I hope they do stick with their plan, and increase the ambition of it, but if they are one of the top 10 greenest companies in the country, what are all the other guys doing?

  6. mboli Says:

    Yap. I agree with @jimbills that some funny numbers are possibly going on here. Two things struck me.

    — One is retiring the Palisades nuclear generating station in 2022.
    — The other is a claim that their CO2 emissions are down 38% since 2005, which is almost half way to their claimed goal of 80%.

    Apparently Consumers Energy had been trying to get out of their long term power purchase agreements from Palisades (owned by Entergy). The latest plan will shut the plant in 2022. Which means that a 19% slice of their generation which has no CO2 emissions will evaporate in a couple of years. Which seems to me a big step in the wrong direction.

    I think there are funny numbers in the carbon accounting. Consumers picked a 2005 baseline, then claimed that they are already down 38%. EPA eGRID has 2005 and 2016 numbers, which say their *rate* is down less than 19% and their *total* is down only 2%.

    2005 eGRID says 1563 lb/MWh, total electricity 76,678,048 MWh
    2016 eGRID says 1272 lb/MWh, total electricity 92,326,063 MWh

    The 2030 goals are not *quite* as grim as it it looks in their brochure (and @jimbills noticed), because a lot of their fossil fuel generators are supposed to run to the end of their design life in 2031. So 2032 will be presumably a lot better than 2030.

    But to my mind, the RFCM subregion seems contiguous with Consumers Energy, and the 2016 numbers from EPA database does not agree with what Consumers Energy is saying about 2018.

    There may be good and valid reasons, for example the differences may be due to power purchased from elsewhere? Or the RFCM subregion is not exactly contiguous with Consumers Energy?

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