Capital Area Friends of the Environment, a Lansing-based environmental group, has filed a lawsuit to obtain a copy of the Lansing Board of Water & Light’s (BWL) contract to supply electricity to the new electric car battery plant in Delta Township. CAFE is seeking to understand whether the contract, which could be worth close to $1 billion for the plant’s owner, has played a role in BWL’s decisions to raise electricity rates and install new gas-burning power.

 

Earlier this year, CAFE requested the contract under the Michigan Freedom of Information Act (FOIA), but the BWL, Michigan’s largest public utility, denied the request. In August, CAFE filed suit in the 30th Circuit Court in Lansing. This month, the BWL moved to dismiss the suit. A hearing is scheduled for October 29 before judge Wanda M. Stokes.“We support the electric car battery plant and believe it will provide significant economic and environmental benefits,” said Dusty Horwitt, CAFE Board member and former commissioner on the BWL’s Board of Commissioners, the utility’s governing board. “At the same time, it is important for the public to know if this contract is well-designed economically and environmentally including whether it’s consistent with BWL’s promise that the deal would not lead to a rate increase.”

 

In December 2021, the BWL’s Board of Commissioners authorized the utility’s general manager to negotiate a “Special Electric Service Contract” to provide electricity to the new electric car battery manufacturing plant. The BWL’s General Manager Dick Peffley estimated that the contract could bring the BWL more than $800 million in revenue over its duration and would not cause a rate increase. Since beginning negotiations to supply electricity to the battery plant, BWL has raised residential electricity rates more than 20 percent, though the increases are not necessarily due to the contract with the plant. Peffley said that the contract could provide the owners of the battery plant with an incentive worth almost $1 billion over 20 years. He told one news outlet that the plant would draw 20 percent of the BWL’s power and told another outlet that the plant would increase the BWL’s average daily electricity load by 35 percent.

 

In its response to CAFE’s FOIA request earlier this year, the BWL indicated that it wants to keep the contract secret from the public, citing a state law that allows a municipal utility to withhold contracts if the contracts contain pricing or other confidential information. Based on a showing of good cause, the law allows a court to order such contracts to be disclosed, subject to appropriate confidentiality provisions. The BWL did not say, even in generic terms, what the confidential information in its contract might be. General Manager Peffley has been quoted in multiple media outlets, including The Detroit News, Crain’s Detroit Business, and Fox47 discussing the potential terms of the contract. These terms include the price of electricity offered by the BWL. Therefore, the utility could not legitimately claim that the publicly disclosed terms are confidential.

 

CAFE’s lawsuit claims that the BWL violated the FOIA because the BWL did not state with specificity why its contract should be exempt from disclosure. CAFE is asking the court to direct the BWL to disclose the contract subject to any confidentiality provisions the Court deems appropriate.

 

CAFE believes that the public has a strong interest in viewing the contract for multiple reasons including to evaluate whether the agreement has prompted other BWL decisions such as the $750 million expansion in electricity generation announced in July 2023. That expansion includes the construction of a $170 million gas-burning power plant, which will emit into the region’s air not only greenhouse gases but also other harmful air pollutants.