A plan drafted by the U.S. Environmental Protection Agency would require Michigan to reduce carbon output by 31.5 percent from 2012 levels, when its utilities pumped 63 million metric tons into the atmosphere — 11th highest among the states. Coal-fired power plants are the leading source of greenhouse gases pushing the climate toward warming that scientists say could produce catastrophic damage.
Coal is the primary fuel for electricity in Michigan, as in neighboring states in the industrial Midwest. Michigan gets 49 percent of its power from coal, 26 percent from nuclear plants and 20 percent from natural gas.
Even so, state regulators and power companies acknowledge the need for change. Many coal-fired plants are being phased out, and Republican Gov. Rick Snyder announced a "no-regrets" energy policy last December that included less reliance on coal and greater use of natural gas and renewables.
"Unlike a lot of states that just come out of the chute in opposition to this, we support the goal" of the Obama plan, said Dan Wyant, director of the Michigan Department of Environmental Quality. "That's good for the environment and long-term good for Michigan. Yet we need the flexibility and timeliness to make a smooth transition. We do not want to put Michigan ratepayers and businesses at a competitive disadvantage compared to other states."
He said the department was awaiting more detail about how the rule would work, including deadlines and how much credit Michigan would receive for greenhouse gas reductions already achieved. Until then, he said it was unclear how big a challenge the plan would pose or what it might cost ratepayers.
EPA estimates that about 6 percent of emission reductions could be achieved through greater efficiency at coal-fired plants. Other means include using less coal, greater reliance on renewables and reducing consumer demand.
Michigan law requires utilities to produce 10 percent of their power from renewable sources by the end of 2015. Voters rejected a ballot initiative two years ago pushed by environmental groups that called for a 25 percent requirement by 2025, which opponents said would boost electric bills.
Wind farms have proven unpopular in some locations, where nearby residents complain that turbines are noisy and cause health problems. Proposals to locate them offshore in the Great Lakes have stirred objections about marring views.
Those hurdles illustrate how difficult it may be to achieve the EPA goal, which is certain to be a political target as well. Terri Lynn Land, the likely Republican nominee in the battle for the U.S. Senate seat being vacated by Democrat Carl Levin, labeled the rule part of an Obama administration "war on Michigan."
But reaction from state officials and businesses — including Consumers Energy and DTE Energy, Michigan's two top electricity providers — was cautious.
Consumers announced plans this year to retire its seven oldest coal-burning plants by 2016. The utility also is constructing its second wind park. Spokesman Dan Bishop said Consumers will study the EPA rule but intends to cut carbon emissions 20 percent by 2025.
DTE has spent nearly $2 billion on emissions control equipment at its Monroe Power Plant in southeastern Michigan, the third-largest coal-fired generator in North America, and a similar amount on renewable projects, spokesman Alejandro Bodipo-Memba said.
"We know that coal will continue to be an important fuel for energy production," he said, adding that the company will continue reducing carbon pollution and retiring older coal plants while working with EPA and state officials on a plan suitable for Michigan.
Jason Geer, energy and environmental policy director for the Michigan Chamber of Commerce, said there was "no question" the rule would cost jobs and boost energy costs but said much depends on how much flexibility EPA grants states for implementation.
Environmental groups roundly praised the plan.
"By investing in clean energy, we can keep more hard-earned dollars cycling through Michigan's economy instead of sending it to other states," said Jim Dulzo, energy policy adviser with the Michigan Land Use Institute.