The ruling by the Department of Natural Resources and Environment dooms the plant unless Wolverine Power Supply Cooperative mounts a successful court challenge. A telephone message left Friday with the co-op, a wholesaler that provides electricity to more than 220,000 customers in northern Michigan, was not immediately returned.

The DNRE said its decision was based largely on a finding last year by Michigan Public Service Commission staffers that the plant wasn't needed and would raise the average residential customer's rate by nearly 60 percent -- or $76.95 per month.

The rate per kilowatt hour would jump from 13 cents to just over 20 cents -- higher than anywhere in the nation except Hawaii, the commission staff said.

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"We are protecting hundreds of thousands of Michigan homeowners, businesses and farmers from paying a whopping increase in their electric bills," Gov. Jennifer Granholm said.

State House GOP Leader Kevin Elsenheimer of Kewadin and Sen. Jason Allen of Alanson, who represent parts of Wolverine's service area, said the plant "would have boosted northern Michigan's economy with 2,500 good-paying construction jobs and established a base power generation source that would help the region to rebuild and grow for the future."

But Granholm said by raising the cost of doing business in the region, the plant would be "a job killer and a roadblock in our efforts to bring new economic development investments to Michigan."

Fueled primarily by coal and petroleum coke, the plant also would boost air pollution, she said. Coal incineration is a leading source of carbon dioxide, a greenhouse gas believed to be a leading cause of climate change, and emits other contaminants such as mercury.

The Wolverine project is among several proposals for coal-burning plants in Michigan.

State officials granted Consumers Energy an air quality permit last December for an 830-megawatt generator in Bay County's Hampton Township, even though it also had gotten poor reviews from the Public Service Commission. Opponents have asked a court to overturn that decision.

In the Wolverine case, the DNRE said there were cheaper and greener ways for the co-op to meet future demand for electricity.

Environmentalists said the ruling would encourage development of alternative energy sources such as wind and solar power.

"Coal is an outdated, dirty and dangerous way to generate power and it is a dead end for Michigan jobs," said Anne Woiwode, director of the Sierra Club's state chapter.

But U.S. Rep. Bart Stupak, a Democrat whose district includes the northeastern Lower Peninsula, said the Wolverine project had won a federal grant to test a new method of capturing carbon dioxide and storing it underground.

"This proposed plant would have been cleaner and greener than most existing power plants in Michigan and would have led the nation in improving and developing cutting-edge clean energy technologies," Stupak said.