It's a difficult one.
Was EP a significant figure in Wolverhampton's history - yes he was, and as such it may be considered appropriate to commemorate him.
But since he was most remembered for his divisive race speech, is it then appropriate to commemorate him?
It's not possible to divorce one from the other.
As a extreme parallel - Hitler loved dogs, but you wouldn't see him getting an honorary mention in RSPCA lists of dog-loving figures from history!
I would be inclined to give the plaque a swerve - it's going to cause more harm than good, and it's not as though anyone is going to remember Mr Powell for much else than his infamous prophesies.