Did Consumers Energy Management Shift, Natural Gas Find, Change Local Plan?
Change of Direction Takes Place Days After New President, Team Installed
May 30, 2010
By: Dave Rogers
Recent management shakeups in the top officials of Consumers Energy company have some local business observers wondering.
"The fact that the delay in the proposed $2.3 billion Karn-Weadock expansion in Bay City was announced less than a week after a new management team took over is puzzling," said one local business executive.
"Of course we in the Great Lakes Saginaw Bay Region are happy that Consumers is issuing assurances their investments here will continue, we have to wonder about the apparent change in outlook," said a local official. "Everyone was anticipating the economic boost from the expansion, especially since the air permit was issued, coming at any moment so it is somewhat of a letdown."
Some observers see the future possibility of the conversion of the plant to natural gas instead of coal, noting that a company executive referenced a huge northern Michigan natural gas play in the Antrim shale formation. (See MyBayCity.com May 9, 2010, "Natural Gas Leasing Bonanza Brings in $178 Million to the State in One Day.")
Cleaner burning natural gas would be less controversial, more environmentally friendly and perhaps cheaper, with additional supplies being developed not only in the Traverse City area but also available in parts of the Thumb.
On May 21 the following changes were effective:
John G. Russell, 43, became president and chief executive officer-electric. He succeeds David W. Joos who was elected president and chief operating officer of CMS Energy on October 1.
"John Russell is a seasoned executive with a broad range of experience in the electric utility. He led our electric restructuring implementation project to make choice available to customers," said Joos. "His leadership will be essential as we continue to implement the provisions of Michigan's electric restructuring law."
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Russell was previously senior vice president of electric transmission and distribution, a post he held since September 1999. Russell joined the utility in 1981 in the general services department and has held increasingly responsible positions in material services, economic development, customer service and electric customer operations. Russell graduated from Michigan
State University with a bachelor of arts degree in business administration in 1980.
Frank Johnson, senior vice president of energy operations, and James Coddington, vice president of generation operations, have elected to retire, effective Sept. 1. Johnson joined Consumers Energy in 1970, and Coddington joined the utility in 1972.
Dan Malone will succeed Johnson, and become senior vice president of distribution and customer operations. Malone first joined Consumers Energy in 1984 and has served as vice president of customer and energy operations services and safety since 2009.
Reporting to Malone will be Rufus Gladney, newly named vice president of energy operations, and Sue Swan, vice president of the Smart Grid program. Swan has served as vice president of business technology solutions.
Gladney, who joined the company in 1978, now serves as the utility's executive manager of energy services west.
Jack Hanson, vice president of generation engineering and services since 2006, will be named senior vice president of electric generation. Reporting to Hanson will be Jim Pomaranski, vice president of generation construction, and Rich Ford, currently vice president of energy delivery. Ford will be named vice president of generation operations.
Tim Sparks will take on the new position of vice president of energy supply operations, reporting to Bill Garrity, senior vice president of energy supply. Sparks, who joined the company in 1990, has served as the director of fossil fuel supply since 2006.
The changes were made effective May 21 after the CMS Energy Board of Directors meeting.
"The changes announced today reflect a strategic transition of talented and experienced executives into expanded leadership roles to meet the challenges and opportunities of a new decade. We remain dedicated to providing customers with safe, reliable and affordable electric and natural gas service," said John Russell, president and chief operating officer for Consumers Energy.
Last October Russell was named as president and chief executive officer for CMS Energy and Consumers Energy, the appointment becoming effective after the May 21 CMS Energy Board of Directors meeting.
Consumers Energy, the principal subsidiary of CMS Energy, provides natural gas and electricity to nearly 6.5 million of Michigan's 10 million residents in all 68 Lower Peninsula counties.
Consumers Energy, the principal subsidiary of CMS Energy, announced today that it is deferring the development of the 830-megawatt clean coal power plant that it planned to have in operation in 2017.
The Michigan utility is deferring -- not canceling -- development of the new unit because of reduced customer demand for electricity due to the recession, forecasted lower natural gas prices due to recent developments in shale gas recovery technology, and projected surplus generating capacity in the Midwest market.
Mr. Russell said: "We continue to believe that new clean coal generating capacity will be in the long-term best interests of our 1.8 million electric customers as part of a balanced energy portfolio, but the current timetable for the new unit isn't consistent with today's market conditions.
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"Based on the latest market dynamics, we have determined that it is in the best interests of our customers to defer development of the new plant at this time," said John Russell, the president and chief executive officer of CMS Energy and Consumers Energy.
He said the company will monitor customer demand, fuel and power prices, and other market conditions, but has set no timetable for a future decision about the project.
Russell said the company remains committed to its Balanced Energy Initiative and maintaining a balanced portfolio of energy resources to serve its customers. That portfolio is based on existing generating plants and market purchases, increased renewable energy resources, and energy efficiency.
He said the company also remains committed to its Growing Forward strategy, which calls for investing approximately $7 billion in its electric and natural gas utility operations over the next five years. The new clean coal unit made up about $1 billion of that five-year total and the company expects to make other investments in place of the coal plant.
"We have a number of alternative investment options, including additional environmental controls on some of our existing coal-fired units, that will support our efforts to provide customers with reliable and affordable energy," he said, adding those substantial investments are expected to create nearly the same number of jobs as the clean coal plant, boosting the state's economy.
Consumers Energy announced plans in 2007 to build an 830-megawatt clean coal unit at its Karn/Weadock Generating Complex near Bay City, Mich. It received an air permit for the project in December.
CMS Energy (NYSE: CMS) is a Michigan-based company that has an electric and natural gas utility, Consumers Energy, as its primary business and also owns and operates independent power generation businesses.
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Dave Rogers is a former editorial writer for the Bay City Times and a widely read,
respected journalist/writer in and around Bay City.
(Contact Dave Via Email at email@example.com)
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