Michigan governor puts new coal power plants on hold

Granholm, a Democrat, announced the cleaner-energy efforts during her state of the state address on Tuesday night.

Granholm directed the state's Department of Environmental Quality to seek "all feasible prudent alternatives before approving new coal-fired power plants in Michigan."

Also, the need for new generation should be considered before a coal plant is approved, the governor said.

In a separate move, Georgia legislators introduced a bill on Tuesday that, if passed, could limit utility use of certain Appalachian coal beginning in 2011 and place a moratorium on new coal-plant construction in the state.

In Michigan, about 65 percent of the power generation is from coal-fired power plants. Most of the coal is imported from Wyoming and Montana, according to the U.S. Energy Information Administration.

Another 5 percent of electricity generation comes from natural gas power plants, meaning the cuts by 2020 would be from 70 percent to 45 percent of fossil fueled plants.

The seven coal-fired power plants in various stages of the permitting process in Michigan represent the most among any of the states and 10 percent of the 70 U.S. coal-fired power plant proposals, said Bruce Nilles, who heads the Sierra Club's fight to stop conventional coal plants.

Industry lobbyist Bracewell Giuliani's energy analyst Frank Maisano said the Michigan move does not spell an end to new coal plants. Maisano said states with fast-growing population like Texas aren't stopping all coal plant plans.

"If you need power now, you can't afford to wait for renewables to be there for you," said Maisano. "You can't afford to wait for the transmission lines to be built for you."

The fact that Michigan is losing population and is not in need of new power plants quickly makes it easy for Granholm to put coal plants on hold, said Maisano.

"Michigan has negative growth," said Maisano. "Its economy has been in shambles for eight years because manufacturing and the auto industries are struggling. They have nuclear power and baseload from existing plants, and they want to add renewables."

Nilles said he knows Granholm did not reject the seven plants, but put them on hold for further study. But he hopes that the action will eventually lead to outright rejection of them.

Nilles pointed to a cutback from almost 200 proposed coal-fired plants about 5 years ago to about 70 proposed ones today as evidence that coal was on the run.

"We are getting closer and closer to ending this insane rush to build coal plants," said Nilles.

(Reporting by Bernie Woodall; editing by Carol Bishopric)