City Manager Martin Colburn outlines Chelsea’s role in the MPPA’s plan to shift from coal to natural gas power, securing greener energy for the community.
Chelsea City Council recently approved a key contract for the Belle River energy project, moving the city closer to a greener future by transitioning from coal to natural gas power.
At the Chelsea City Council meeting on September 16, 2024, City Manager Martin Colburn provided an update on the city’s participation in the Belle River energy project, a part of a larger initiative through the Michigan Public Power Agency (MPPA). This project, which is transitioning from coal to natural gas power, aims to move Chelsea and other Michigan municipalities toward greener energy sources.
Colburn explained that Chelsea had been a member of MPPA, a consortium of municipal electric companies, since 1982, and its participation in the Belle River project is a key part of the city’s energy future. “One of the real key elements to that also was how we can join in and in this particular project,” Colburn noted, highlighting the significance of Chelsea’s 1.34% ownership of the 28% owned through MPPA. Larger participants include Lansing, with nearly two-thirds of the ownership, and Holland, with 15.66%.
A central component of the Belle River project involves decommissioning two coal-fired plants. These plants will be replaced with natural gas facilities, which Colburn acknowledged isn’t entirely “green” but is an important step toward meeting the state’s energy needs while adhering to environmental goals. He noted, “The purists would say that that’s still not green enough, but we have to be able to create and establish electricity to be able to run the state.”
To fund this transition, MPPA will issue bonds on behalf of the participating cities. Chelsea’s share of the project cost will be covered by MPPA, with the city responsible for paying its proportional share of the bond payments. Colburn assured the council that the bonds will not directly affect the city’s finances. “The bonds do not go through the individual cities. It’s through MPPA. They would purchase it on our behalf, and we pay our pro ratio portion,” he explained.
Some cities, like Holland and Zeeland, have chosen to pay cash for their share, avoiding interest costs associated with the bonds. For most other cities, including Chelsea, bond purchasing is expected to take place either late in 2024 or early in 2025. Colburn mentioned that the city may benefit from lower interest rates.
Following Colburn’s presentation, the council moved to approve the MPPA project support contract for Chelsea’s participation in the Belle River project.
