BWL will negotiate discounted electric rates for possible GM battery plant

Posted at 10:52 AM, Dec 15, 2021
and last updated 2021-12-15 10:56:49-05

LANSING, Mich. — The Lansing Board of Water and Light's Board of Commissioners voted unanimously Tuesday night to allow General Manager Dick Peffley to negotiate discounted electric rates for the $2.5 billion dollar battery plant that General Motors might build in Lansing.

The hope is that a competitive proposal would convince GM to bring the facility here.

“We currently have 50,000 residential customers, if you add it all in together, this project will draw 25 percent more energy than our entire customer residential customer base,” Peffley said.

BWL's board authorized Peffley to negotiate a contract with Ultium Cells LLC, a partnership between GM and LG Energy Solution, that Peffley said "would entail a very attractive electric rate."

The incentive BWL plans to offer would be $936 million based on a 20-year contract, though it could be more or less depending on how much electricity the plant uses.

Peffley emphasized that it will not affect any Board of Water and Light customer negatively and will not cause a rate increase. According to Peffley, it is offered “because of the economy of the scale.”

The Board of Water and Light officials say they cannot disclose the exact rates as of right now because of a non-disclosure agreement.

“The electric rate is the core to our regional proposal..." said Bob Trezise, the president and CEO of the Lansing Economic Area Partnership. "These electric rates are competitive with anybody in the country."

Trezise emphasized what the project would mean for Lansing, even when it comes to climate change.

“This is one of the most tangible ways that we can actually make, I think, an action series difference in combating globally this issue,” he said.

The battery plant would not only create 1,700 jobs but also revenue for the utility.

“It equates to about $858 million of revenue over the contract term for the Board of Water and Light and is very good news for the Lansing region,” Peffley said.

Peffley said, the Board of Water and Light could supply sufficient energy until 2027. To guarantee a 20-year contract, the utility might have to install additional generating capacity at its Delta Energy Park.

GM, Lansing Delta Township
GM, Lansing Delta Township

“I’m saying failure is not an option, and we will do what it takes to get this customer here,” Peffley said.

Trezise said he will submit the regional package to GM today, assuming that city officials will approve the package at a final meeting on Monday.

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