The City of Holland and its municipal power utility think that the city’s position on Lake Macatawa makes it special, and they don’t want to continue to operate a power plant on its shores.
After considering nine different sites around the city and following a decade of planning, Holland plans to build its new energy park on a 9.7-acre parcel near Fifth Street and Fairbanks Avenue that previously housed a manufacturing facility, an excavating company and multiple residences. The dilapidated property was also home to 350 tires, scrap metal and whatever else people had dumped there over the years, said Dan Nally, business services director at the Holland Board of Public Works (BPW), the city’s municipal utility.
Upon completion of the nearly $200 million power plant project — expected in 2016 — the land will have a public park component so that visitors can view the scenic wetlands on the site.
“We’ve been able to take this mixed-use area, consolidate it and renovate it,” Nally said. “We’ll put a power plant in that will provide a lot of value to Holland and its citizens, but it will also be an area where people can take a walk and look at the Macatawa Greenway to the north, which is very beautiful wetlands. And it changes the character of the entrance to Holland when you drive down Chicago Drive. It will definitely look different — hopefully (for the) better.”
Overall land use principles played a large determining factor in the site selection process for the new power plant, Nally said.
The BPW was adamant that the new power plant, which has an expected lifespan of more than 30 years, be built somewhere other than on Lake Macatawa, where the existing coal-fired James De Young Power Plant currently sits. The choice of an inland location was made easier by the decision to build a natural gas-fired power plant, Nally said.
“We didn’t need cooling for this type of plant similar to the coal plants, and there’s a higher value for the waterfront land,” Nally said.
The municipal utility looked at nine different sites before settling on the Fifth Street property. Southfield-based Barton Malow Company will provide engineering services for the project and Nebraska-based HDR Inc. is the project’s designer.
To help expedite the lengthy process, the city and the BPW worked to rigorously engage the community.
“I think if anyone is looking to build a power plant these days, this type of process really isn’t optional,” Nally said. “You have to do that. You have to engage the public and you have to make the sausage, if you will — as messy as it is — to get that support.”
At least one energy expert agrees with Nally’s observation.
“If you’re going to build a gas-fired power plant, you couldn’t use a more careful and thoughtful approach than (the Holland BPW) is using,” said Jim Dulzo, senior energy policy specialist at Traverse City-based Michigan Land Use Institute. “The Holland Community Energy Plan is very good, and if they stick to it, they will be a beacon on this continent.”
The Community Energy Plan formed the basis for the decision to construct a new plant. Adopted in 2011 by the Holland City Council, the initiative offered a 40-year vision to significantly reduce the city’s greenhouse gas emissions and still fulfill the community’s energy needs.
To fund the project — the largest civil project in Holland’s history — the city sold $158.84 million in municipal bonds, accounting for 72 percent of the funding. The selling of bonds was approved by the Holland City Council and BPW’s board of directors.
The remaining funds are to be provided by BPW cash reserves, according to the organization.
The Holland energy utility’s decision to switch to natural gas for its power generation is hardly an isolated incident. Nationally and regionally, utilities are increasingly investing in natural gas plants for their power needs as they retire aging coal plants. Much of this switch can be attributed to the large supply of natural gas, as well as tighter regulations for the burning of coal, Nally said.
The price of natural gas has also proven to be attractive. In February 2003, the cost of natural gas was at $11.98 per million Btu, according to data from the U.S. Energy Information Administration (EIA) website. At the end of 2014, natural gas hovered around $3 per million Btu.
The low cost and large supply of natural gas has larger utilities like Consumers Energy and DTE also investing in natural gas plants— as well as in renewable energy projects to fulfill the 10-percent state alternative energy mandate. The utilities are expecting to close nine of their coal plants in Michigan by 2016, according to a November report by Public Sector Consultants (PSC), a Lansing public policy research firm.
The size and scale of the larger utilities allows them to upgrade to natural gas in a much more cost-effective manner than Holland BPW, which has only one relatively small coal plant, Nally said. As the BPW undertakes this costly effort in a city often known for its frugality, Nally remains confident the correct decisions are being made.
“(The BPW) is expected to look out 50 years,” Nally said. “In this day and age, no one wants to. Everyone is thinking about the next month. So we have to make good decisions to support this community and provide the infrastructure they need hoping that what it’s going to be like 40 or 50 years from now is accurate.”