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February 25, 2006Cleanup cost at Bay Harbor now estimated at $85 millionPETOSKEY - The estimated cost to remedy pollution at Bay Harbor has nearly doubled, from $45 to $85 million.The revised figure, released Friday as part of CMS Energy's fourth-quarter earnings report, jumped because company officials, since making last year's estimate, developed a clearer picture of the extent of contamination, said CMS spokesman Jeff Holyfield. Released about a year ago, the initial $45 million projection was "based on very limited data," Holyfield said. "We hadn't stuck a shovel in the ground or anything at that point. That was the best estimate we could provide," he said. "Now that we've got more data and have a better idea of what we're dealing with there, we've adjusted our estimate." Formerly home to a cement plant, the posh, gated housing development on Little Traverse Bay west of Petoskey has been plagued with environmental woes. Caustic kiln dust, a byproduct of the cement operation, was discovered in 2004 seeping into Lake Michigan. Initial developing partner CMS agreed last year to fund an extensive, increasingly expensive, environmental cleanup. A CMS business news release for investors accompanying Friday's year-end report noted a fourth quarter charge for $26 million "because of revised estimates to complete environmental remediation work associated ... with the Bay Harbor project ... ." The $26 million figure reflects an after-tax impact on company earnings. The true adjustment to the projected cleanup cost was $40 million, Holyfield said. The hike isn't attributable to any single discovery, he said. "There's no specific reason. It's just really overall. The payments to consultants, the drilling - once we got into it, things ended up costing more than initially expected," he said. Ralph Dollhopf, the Environmental Protection Agency official overseeing Bay Harbor remediation, said Holyfield's explanation "makes sense." "We don't have direct access to information as to how much things cost (CMS). I don't mean to imply that we don't engage in dialogue where they say, 'This option would cost us this much and that option is this expensive.' But we don't track their costs," Dollhopf said. Holyfield said the initial $45 million figure was never written in stone. "We said right up front that ... this is an estimate. We haven't done field work," he said. Such work is under way. In the past year, CMS installed a series of collection trenches around multiple buried kiln dust "piles," a temporary stopgap measure to keep more contaminants from reaching Lake Michigan while a long-term solution is researched. CMS also performed extensive survey work. In all, about 300 boring samples have been taken around Bay Harbor and will be used to develop an understanding of site geology and how water flows under and through it. As that work continues, the cost estimate could change again, Holyfield said. "There's no way we can say, 'Well, we're 95 percent sure that this is solid,'" he said. "Who knows? We're still in the research phase. Nobody's got a crystal ball good enough to say there won't be any surprises going along through this project."
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