Propelled by a unanimous approval from the Michigan Public Service Commission, Forsite Development is preparing to buy two shuttered coal power plants from Michigan’s Consumers Energy: the B.C. Cobb plant in Muskegon and J.R. Whiting plant in Luna Pier.
Consumers Energy ran a 14-month process to interview and compare prospective buyers before selecting Forsite for the strength of its vision for redeveloping the sites and its ability to provide Consumers with a fixed-cost decommissioning solution.
Forsite will acquire the sites via an environmental liability risk transfer transaction that includes the North Carolina-based company assuming the responsibility and liability to fully decommission the plants and to perform environmental remediation for a fixed cost.
“We evaluated firms throughout the United States,” said Scott Thomas, executive director of project development at Consumers Energy. “We found Forsite’s redevelopment experience and unique risk transfer offering provided the greatest benefit to the two communities and to our customers. Our company is committed to leaving it better than we found it; Forsite’s plan accomplishes this.”
Utilities are starting to favor risk transfer transactions for the divestment of their shuttered coal plants as they remove liabilities and provide a clear path toward redevelopment. Utility commissions are also in favor as risk transfer transactions protect ratepayers from cost overruns, and communities welcome a viable redevelopment plan that can replace lost jobs and tax base.
“The sheer number of shuttered coal power plants has created a unique opportunity for our risk transfer model,” said Tom McKittrick, CEO and founder of Forsite. “We see tremendous opportunity to repurpose existing infrastructure and transition these sites back to a productive use.”
For the B.C. Cobb plant in Muskegon, Forsite partnered with local shipping operator Verplank Dock Co. to develop a port terminal facility utilizing the site’s extensive deep-water dockage. The plan includes establishing an alternate transportation route for Michigan agricultural products via Muskegon to the Port of Milwaukee, which bypasses the congested Chicago transportation system.
The J.R. Whiting plant has extensive rail infrastructure and is located directly off I-75 in Luna Pier between Detroit and Toledo, Ohio. Forsite is in discussions with several rail services companies interested in creating an intermodal (truck-to-rail) at the site.
Forsite estimates the decommissioning work at each plant will take approximately two years. It partnered with Midland, Michigan-based Bierlein Companies to perform all asbestos abatement and conduct demolition for both plants while Austin, Texas-based Energy Renewal Partners, LLC will manage decommissioning and remediation.
“Consumers Energy placed a high priority on experience with similar projects,” McKittrick said. “Our team has some of the deepest expertise in the industry.
“Environmental stewardship is a central theme for all of our projects. Forsite is looking to incorporate utility-owned renewable energy where possible, utilizing existing grid connections. We are also looking to protect land with conservation easements including stream, wetland and habitat restoration projects.”
While not part of the Consumers Energy divestment, existing connections to the power grid can also make renewable energy development and, potentially, battery storage projects more viable at former coal plants.
Read more about ERP’s involvement in the B.C Cobb plant here.