Chelsea City Manager Marty Colburn discusses the city’s steps toward greener energy through a new agreement with the Michigan Public Power Agency.

Photo: Garfield Street substation. Google Streetview, June 2024.

At the September 3, 2024, Chelsea City Council meeting, City Manager Marty Colburn outlined the ongoing negotiations between the City of Chelsea and the Michigan Public Power Agency (MPPA) regarding a new project support contract to help transition the Belle River power plant from coal to natural gas.

“This agreement is about keeping our communities powered while moving toward greener energy,” said Colburn. “It’s not the greenest solution, but it is certainly a step in the right direction.”

The contract involves 11 communities, including Chelsea, which originally entered into a consortium agreement in 1982. DTE Energy, which owns a majority share of the Belle River power plant, plans to decommission the coal plants gradually and convert them to natural gas by 2039. The MPPA, which owns 28% of the plant, is leading this transition.

Under the new hybrid agreement, Chelsea holds a 1.34% ownership in the power plant’s future operations. While some communities in the consortium, like Zeeland and Holland, opt to pay their share in cash, others, including Chelsea, will participate in a bond issuance scheduled for late 2024 or early 2025. “We are partial owners, and we strongly recommend moving forward with this agreement,” said Colburn. “We need to ensure our city continues to have reliable energy.”

Addressing the council’s questions, Colburn clarified that the city’s electric fund, not the general fund, would cover the financial obligation tied to this agreement. “Paying back these bonds would come from the electric company fund, not from the city’s general funds,” he emphasized.

While the plan aligns with state goals for transitioning away from coal, Colburn noted that some state objectives might be too aggressive, making them challenging to meet. “Our focus remains on achieving a balance between greener energy and ensuring reliable power for our community,” he said.

The council unanimously approved the MPPA Project Support Contract between the City of Chelsea and the Michigan Public Power Agency. This was not a vote on the bond purchase, which will come to the Council before the end of October.

“We know this is important for our future, both in terms of energy and environmental impact,” Colburn concluded. “This agreement does move the needle towards a greener Chelsea.”