Where are we now?
Thanks largely to Michigan’s clean energy standards—created by a bipartisan team of legislators in 2008—our state has seen incredible growth and investment in renewable energy and energy efficiency. But we are in danger of losing that progress because of legislative proposals that are currently on the table in Lansing.
Michigan is a success story for clean energy job growth, a success story we would like to keep telling. As the Legislature considers changes to the 2008 energy laws, we need to make sure we’re building on this success, not turning back the clock on progress.” – Liesl-Eichler Clark, President Michigan Energy Innovation Business Council
The goal of a strong Michigan-centered energy policy should be to maximize benefits for Michigan families and businesses. And in order to ensure sustained growth in Michigan’s renewable energy and energy efficiency industry, Michigan legislators should provide businesses the certainty they need to make investments here in Michigan rather than somewhere else.
Why Do we need Standards?
Our clean energy standards are lowering electricity costs for consumers while allowing us to transition away from expensive and dirty coal-fired energy:
The renewable energy we’re adding is actually helping to lower energy prices because it’s so competitive. We just need the best decision-making process so that, depending on what the prices are and what we need, we can take advantage of our lowest cost resources, which in many cases will be renewable energy.” – Valerie Brader, Executive Director for Michigan Agency for Energy, (Traverse City Record Eagle, November 2015)
But although renewable energy is cost-competitive with natural gas (and much less expensive than coal), these different energy sources do not operate on a level playing field. The scales are structurally tipped to favor expensive, conventional power plants. That’s why a diversified energy mix won’t happen without the support of a standard or enforceable goal. And that’s why we need to keep doing the legwork to make sure renewable energy gets a fair shot.
What would set Michigan up for a successful, achievable Clean energy Future?
- Michigan should move beyond our current 10% renewable energy standard to achieve a new 25% renewable energy standard
- Michigan should increase our energy efficiency standard from 1% annual improvements to at least 1.5%
- Michigan should improve our current net metering standard to include fair grid cost recovery without unfairly burdening individual solar producers.
Unfortunately, the Michigan legislature is set to double-down on dirty energy and the higher costs that come with it. There are currently two competing proposals in the Michigan House and Senate, both of which (as currently written) would put our state on the wrong path.
Michigan LCV and our members have been fighting hard to stop or improve both plans before they land on the Governor’s desk.
It’s up to us to fix these bad bills before they become bad laws.
THE SENATE ENERGY PLAN:
Spearheaded by State Senators Mike Nofs (R-Battle Creek) and John Proos (R-St. Joseph)
Status: Passed out of committee, under consideration in the full Senate
Senate Bill 437 would implement a statewide integrated resource planning (IRP) process. An IRP is a utility plan for meeting forecasted annual peak and energy demand by utilizing a “reasonable and prudent” resource mix. This bill requires utilities to report how their plan compares to the goal but there is no language included that there is any obligation to achieve the goal. It continues the current Renewable Portfolio Standard of 10% but is only applied to regulated utilities and (again) there is no obligation to meet the standard. In the absence of a strong mechanism to hold utilities accountable, like renewable energy and energy efficiency standards, the IRP process alone is unlikely to spur sustained, robust growth in renewables and efficiency.
Senate Bill 438 would limit Michigan’s renewable energy standard to the current 10% renewable standard and inappropriately expands the definition of “renewable energy.” It would also phase out our current energy efficiency standard for electric utilities by 2021. This bill establishes a weak combined goal of 35% renewable energy and efficiency by 2025. However, this goal doesn’t include any language to allow the MPSC to enforce it and this goal could be hit largely through efficiency. Although the cost caps for net metering are removed, this bill phases out net metering benefits within 10 years and allows the MPSC to establish an unknown and potentially prohibitive cost recovery and rate pay structure.
THE HOUSE ENERGY PLAN:
Spearheaded by State Representative Aric Nesbitt (R-Lawton)
Current status: Passed out of committee, yet to be brought up in full House of Representatives
House Bill 4297 would eliminate Michigan’s energy optimization standard and caps Michigan’s renewable energy standard at 10 percent. HB 4297 allows energy generated out of state to qualify for credit under Michigan’s renewable energy standard and classifies the incineration of municipal solid and hazardous waste as renewable energy.
House Bill 4298 would not allow utilities to implement a rate increase prior to the issuance of an order from the Michigan Public Service Commission, even if the application for a rate increase is considered complete after 30 days. The bill requires the commission to implement a refund process for electric and gas rate overcharges for the customers of utility companies; this provision does not include energy utility companies currently organized as a cooperative corporation. The commission would also require electric utilities to submit an integrated resource plan every 5 years that examines the capacity and reliability capabilities to generate electricity for all consumers. This bill would eliminate the Customer Choice and Electricity Reliability Act. The elimination of the act includes prohibiting alternative electric suppliers from entering into agreements with customers, and requires customers of alternative suppliers to return to their initial electricity provider once the contract with the alternative supplier ends.
Energy Quick Facts:
-According to the Michigan Public Service Commission (MPSC) Michigan’s renewable energy standard has brought in close to $3 billion dollars of investment to Michigan.
-According to the MPSC, Michigan’s Clean Energy sector has resulted in more than 87,000 jobs.
-According to the MPSC, Michigan ratepayers save $4.38 for every dollar invested in energy efficiency.
-As of March, 2016, Michigan’s electricity costs are the highest in the Midwest, according to the U.S. Energy Information Administration (March 2016).
-Utilities have shifted costs from industrial to residential customers – placing an excessive burden on Michigan’s ratepayers.
-According to a Lazard Study, renewable energy is now the cheapest form of new generation and is even cheaper than coal and natural gas.
-According to a Michigan Environmental Council report, Michigan’s nine oldest coal plants had a impact of $1.5-billion on public health costs.