Anyone who has not been following along is likely to have difficulty understanding what is happening between the Board of Light and Power and the City of Grand Haven. There are several intertwined issues which date back years and make this a difficult topic to understand. This article will provide a brief history of events that has led us to where we are today.
Today the Board of Light and Power (BLP) skillfully handles the difficult task of purchasing electricity from the grid at fair market prices and maintains electricity distribution infrastructure for the residents of the City of Grand Haven and some residents outside the city limits in Grand Haven Township, Spring Lake, and Ferrysburg. Before February 2020, the BLP operated the J.B. Sims coal power plant for the City of Grand Haven which was located on Harbor Island.
The Grand Haven City Council is controlled by a five-member board elected by the city residents. The BLP also is controlled with a five-member board elected by the residents. Although the BLP operates fairly independently, the City of Grand Haven has some oversight of the BLP.
After years of successful operations beginning in the 1960’s, the combination of rising operating expenses, aging technology, and increasing demands for more environmentally friendly power generation were making J.B. Sims obsolete. After lots of discussion the BLP and the Grand Haven City Council moved forward with a plan for the future. It was determined that the new plan needed to ensure power reliability for customers and to provide power for the recently installed downtown snowmelt system. The snowmelt system was “part of a $5.4 million streetscape project targeting the first three blocks of Washington Avenue in the downtown”.
The proposal involved constructing a small power plant on Harbor Island, known as a peaking plant, installing solar panel generation infrastructure on Harbor Island, installing batteries for power storage on Harbor Island, and purchasing power from the grid for normal customer usage. The peaking plant would supply power for the snowmelt system, and ensure power reliability. The plan proceeded forward. J.B. Sims was decommissioned and site preparation for the new infrastructure began.
Coal Combustion Residuals (CCR) are a known byproduct of coal generation power plants. Once the plant was demolished, under the leadership of the BLP, environmental testing began which would help define required steps to ensure the CCR would be contained. Discovery of CCR was anticipated and the BLP set-aside $16 million for clean-up efforts. Unfortunately, the environmental testing revealed that PFAS (perfluoroalkyl or polyfluoroalkyl substances) contamination was also present on Harbor Island. The PFAS contamination likely resulted from when Harbor Island served as the city dump long before J.B. Sims was constructed. This discovery started a chain of events which brings us to the present day.
Immediately, the PFAS discovery raised the question of liability and created friction between the BLP and the City of Grand Haven. What caused the PFAS contamination? Was the City of Grand Haven liable for PFAS remediation or was the BLP? Those questions remain to be answered.
Next, public concerns over the discovery of PFAS led to cancellation of the peaking plant. In August 2021, a group known as the Grand Haven Energy Organization, which was already largely opposed to the peaking plant, was able to organize additional residents to speak in opposition to the peaking plant project at a Grand Haven City Council meeting. Their efforts resulted in cancellation of the project by the Grand Haven City Council, leaving no method for powering the downtown snowmelt system, leaving residents entirely dependent upon the grid, and leaving no clear path forward for Harbor Island.
Already in a financially tight situation, the Grand Haven City Council was facing several potentially very expensive situations.
Would they be liable for a portion of the environmental remediation on Harbor Island?
How would they power the snowmelt system?
The BLP worked with the city to help them through the snowmelt issue. The solution was for the BLP to purchase four snowmelt boilers on behalf of the city for $1 million, and the city would reimburse the BLP at a later date. Unfortunately, a lack of available city funds coupled with the lack of a written agreement complicated repayment of the loan. The meeting minutes from the January 2022 city council meeting state: “Mayor McNally began the discussion on paying the $1,000,000 costs for boilers by requesting the BLP will send the invoice to the city, remarking that the city does not have the money to pay the invoices at the moment.” The two entities reached a mutual agreement for loan repayment terms ten months later in November 2022.
Meanwhile, in February 2022, the Grand Haven City Council took control over environmental testing on Harbor Island by hiring the environmental firm HDR to complete the effort. With an increasingly complicated negotiation between the BLP and the City of Grand Haven on the horizon, in August 2022, the City of Grand Haven informed the BLP they could no longer have independent legal representation, but would be required to be represented by the city’s group of attorneys, Dickinson Wright.
Just to make matters a little more complicated, after the heated meeting in August in which the BLP was informed they could no longer have independent legal representation, a complaint was filed against the members of the BLP board and its administrative staff. The complaint alleged that BLP board member Andrea Hendrick was a victim of discrimination and that intimidation, ridicule and mockery were used to silence her voice during the August 2022 BLP meeting. The complaint was swiftly investigated by the Grand Haven Human Relations Commission and they did not find any proof of gender discrimination.
Although future plans for Harbor Island have not yet been determined, the expected land use will play a role in developing the scope of required environmental remediation. Site specific features including ground water, the adjacent channel, and proximity of Lake Michigan are significant factors in determining clean-up efforts as well. Contamination could be sealed in place or completely removed depending on future usage plans, costs and associated risks. Once the environmental testing is completed and a remediation plan is developed, it will need to be approved by Michigan’s Environment, Great Lakes and Energy (EGLE) agency. Interestingly, the city’s attorney, Dickinson Wright, has informed the BLP that they will be expected to sign the Administrative Consent Order with EGLE despite the fact that they no longer have control over the project.
During the April 26, 2023, joint meeting between the BLP and Grand Haven City Council, the two entities agreed to begin discussions that will hopefully lead to a written agreement which will specify how the environmental clean-up costs will be shared between the two entities, who will lead the project, and who will sign permits and agreements with outside entities.
Recently, the group whose efforts led to the cancellation of the peaking plant, Grand Haven Energy Organization, has changed its name to the Board of Light and Power Charter Change Coalition. They are collecting signatures to place a proposal on the November 2023 ballot that will place the Board of Light and Power (BLP) under the control and direction of the Grand Haven City Council. If this happens, the City of Grand Haven will take full control of the BLP.
It will be up to the voters to decide if this is a good idea. Voters should be asking themselves who stands to gain the most if this happens? Have other cities taken over control of their electric utilities? What has been the result? Who has the technical expertise to lead an environmental clean-up project? How has the BLP performed in its primary task of managing electricity? Are you happy with your electricity services? Are your electricity rates reasonable? Is your power restored in a timely manner? How would that change if the city takes control of managing the BLP?