"Any honest assessment of our state's economy has got to recognize that things are likely to get worse before they get better," Gov. Jennifer Granholm said, touting plans to ease financial strains on families. (Dale G. Young / The Detroit News)
LANSING -- Gov. Jennifer Granholm, in her seventh State of the State address, called Tuesday for a near-moratorium on new coal-fired power plants and a major reduction in reliance on coal for electricity generation over the next decade.
Approval of eight coal plants now in the pipeline will be delayed at least several months while the state reviews alternatives, and some won't be built, the governor and aides indicated.
Alternative energy played a key role in the governor's address, and she hopes to help rebuild the state's economy, in part, by nurturing a "green energy" industry here.
Granholm's address to the Legislature was delivered against the backdrop of an economic crisis and a looming $1.6 billion budget deficit. She proposed several initiatives to ease the stresses on struggling families, including a moratorium on utility shutoffs to needy households, a freeze on car insurance rates and a three-month notice prior to home foreclosures.
"This past year has been brutal. Like few others in our history," the governor told a joint session of the Legislature and a statewide TV audience. "The nation's financial system teetered on the brink of collapse. Our auto companies fought for their very existence, and as the bottom fell out of the national economy the job situation has gone from bad to worse.
"Families across our state can only wonder and worry what new threat tomorrow will bring ... any honest assessment of our state's economy has got to recognize that things are likely to get worse before they get better."
As expected, Granholm proposed an end to the Michigan State Fair, a freeze on tuition rates, elimination of 10 state departments, a 10 percent pay cut for elected state officials, and the transfer of wetlands regulation from the state to the federal Environmental Protection Agency. And she confirmed plans for a new $86 million animation movie studio in Detroit and a $54 million movie studio in Pontiac.
In an address weighted toward energy issues, Granholm said she wants Michigan to be the first state in the nation to let consumers sell energy generated by alternative sources such as wind and solar to utility companies.
In addition, she wants to hire "thousands" of unemployed workers to install weatherization on 100,000 homes, and 1,000 schools and other buildings.
Working with utility companies, Granholm proposed a program to allow home and business owners to weatherize with zero up-front charges, to be paid off with monthly energy savings.
And she wants the state Public Service Commission to issue a moratorium on utility shutoffs, and to direct power companies to allow recently unemployed customers to pay off delinquent electric bills over time rather than face immediate shutoffs. She noted that a 93-year-old Bay City man froze to death recently when his heat was turned off because he could not pay his bill.
Granholm proposed a so-called "45 by 20" plan, meaning the state would reduce its reliance on imported fossil fuels -- including coal -- used to generate electricity 45 percent by 2020. Michigan imports all of its coal, 96 percent of its petroleum and 75 percent of its natural gas.
"Instead of spending nearly $2 billion a year importing coal or natural gas from other states, we'll be spending our energy dollars on Michigan wind turbines, Michigan solar panels, Michigan energy-efficient devices, all designed, manufactured and installed by Michigan workers," Granholm said.
Skip Pruss, director of the Department of Energy, Labor and Economic Growth, said a review of the state's electricity needs and how they would be met will postpone any power plant approval by months. "Some of these will not be built," he said.
Cyndi Roper, director of Clean Water Action in Michigan, was supportive of the governor's energy plans.
"The important message in this was less about opposing coal plants as a policy and more about pursuing clean energy," she said. "A 45 percent reduction in energy from coal in 12 years is the most aggressive policy in the country."
Senate Majority Leader Mike Bishop, R-Rochester, struck a conciliatory tone.
"We're very, very comfortable talking with the governor about ways we can control spending," he said. "We're prepared to stand with her to do that."
New, smaller high schools
In education, Granholm wants to launch 25 new, smaller high schools this year to create a better educational environment.
She also intends to start Promise Zones in 10 low-income communities that would enable schools to partner with private donors to offer free college tuition to students who qualify. And she wants to start an "Algebra for All" program to better prepare teachers to instruct students in math and algebra.
In an effort to ease the hurt of Michigan families who find themselves unable to pay their bills, Granholm will push legislation calling for 90 days' notice before home foreclosures and encouraging negotiations between lenders and borrowers. This law would protect some 91,000 Michiganians who could face foreclosure in the next two years.
"Foreclosures devastate families, but they also undermine housing values for blocks and whole neighborhoods. I urge both chambers to act immediately, act as if the bank were demanding the keys to your home," she said.
The governor also said she would call for auto insurers to voluntarily freeze rates for a year. That would give the Legislature time to consider reforms to be unveiled today by Butch Hollowell, her insurance advocate.
"Our citizens are paying among the highest rates in America for auto insurance they are compelled by law to buy," the governor said, adding that the Office of Financial and Insurance Regulation will use every lever at its disposal to bring down rates.
The Michigan Insurance Coalition, which represents insurers, called the 12-month freeze "ill-conceived."
"Calling for a freeze on auto insurance rates is irresponsible unless the governor is planning to also freeze the rates of hospitals, doctors, auto repair shops and lawyers," said spokesman Tom Shields.