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BWL Announces $500 Million Natural Gas Power Plant

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12/18/2017 12:40:00 PM

New 250 MW plant to be BWL’s biggest project ever, creating 1,200 construction jobs
RACER Trust site to also be redeveloped for new Penn-Hazel Complex

The Lansing Board of Water & Light (BWL) announced today it will build a new, cleaner and efficient $500 million natural gas-fired power plant to complement its investment in renewable energy projects and its energy efficiency programs. The new plant will generate 250 megawatts and create 1,200 construction jobs. It will be located at the Erickson Power Station facility in Delta Township as part of its Lansing Energy Tomorrow plan, which includes retiring the BWL’s coal-fired Eckert plant. Additionally, following the completion of the new plant expected in 2021, the BWL will relocate its Penn-Hazel Complex, including its warehouse and line, water, fleet and maintenance departments, to a new facility to be built at the RACER Trust site off of W. Saginaw St. and Stanley St. on Lansing’s west side.

“This new plant will be the largest project the BWL has ever taken on and allows us to remove a major coal-fired power plant from service,” said General Manager Dick Peffley. “Continuing to generate our own power will ensure Lansing’s energy independence for decades to come so we’re not relying on the grid.

“Following McLaren’s $450 million announcement earlier this month, the BWL’s new plant combines to create nearly $1 billion in new construction activity in the Lansing region. This is unprecedented economic activity in recent memory,” said Peffley.

Eckert, scheduled to retire in 2020, was first constructed in 1922 and over the years has been instrumental in powering Lansing’s growth into a major American manufacturing center for automobiles and shaping today’s diversified economy. Erickson was first built in 1973 and is planned to retire in 2025 as the BWL expands its clean energy portfolio. Retiring these two plants will allow the BWL to become the biggest utility in Michigan that’s coal-free by 2025.

“I’m very proud to see the BWL taking appropriate actions to lead the Lansing region to become a cleaner and greener utility,” said BWL Commission Chair David Price. “This new plant will truly allow BWL to become the utility of the future.”

“We are extremely pleased the BWL has decided to build its new cleaner, natural gas-fired plant at the Erickson facility,” said Delta Twp. Supervisor Ken Fletcher. “This momentous project will allow new growth in Delta Twp. by creating hundreds of new construction jobs.”

Peffley said the team dedicated to finding the location for the new plant came across a viable 50 acres of land at the RACER Trust site in its search, and contingent upon site review and negotiations determined it would be best used to relocate the Penn-Hazel Complex. The outdated Penn-Hazel Complex is on Pennsylvania Ave., south of I-496 and located in a flood zone. It consists of five buildings covering approximately 25 acres and housing 200 employees.

“BWL’s new clean and green power plant will build upon its already strong environmental stewardship for Metro Lansing,” said Lansing Mayor Virg Bernero. “I’m particularly pleased by BWL’s decision to build a new complex on the RACER Trust site, formerly home to GM’s Verlinden auto plant.” Bernero played a leading role, joined by other mayors representing GM communities, in creating RACER Trust during the GM bankruptcy proceedings to help remediate and repurpose vacant automotive facilities.

"People in Lansing and our region want reliable power, as well as green and efficient power. This new plant will help to achieve both,” said Lansing Mayor-elect Andy Schor. “I’m thrilled to be able to hit the ground running with these exciting new developments that will continue to grow this city when I become mayor next year.”

In addition to the new natural gas plant, the Lansing Energy Tomorrow plan also calls for the addition of approximately 100 megawatts of wind energy to be located in Michigan’s thumb-area, the state’s largest sun-tracking solar array in Delta Twp. and growing the BWL’s energy efficiency programs. The BWL is also expanding and modernizing its electric transmission system, with new substations, smart grid investment and a new transmission line. The plan also includes major upgrades to technology, such as converting to smart meters, and a new customer information system. In addition, programs are in the works that are responsive to customer needs and preferences like new rate offerings for high load factor customers and a new, more flexible green rate, which will allow customers to purchase more renewable energy than the BWL already provides.

BWL’s Lansing Energy Tomorrow plan is committed to provide customers 30 percent clean energy by the end of 2020 and 40 percent clean energy by 2030. These ambitious goals stem from the recommendation of the BWL’s Citizen Advisory Committee in 2015 and the BWL Strategic Plan in 2016. The result is a projected 80 percent reduction in carbon emissions by the end of 2025 when the BWL retires its last coal-fired power plant.

The BWL has 96,946 electric customers, 56,159 water customers, 172 steam customers and 19 chilled water customers. More information about the BWL’s clean energy plan can be found at www.LansingEnergyTomorrow.com.