Lansing — Michigan Gov. Rick Snyder on Wednesday signed into law what his office called a series of “historic energy reforms,” quickly finalizing a 234-page plan approved last week by state legislators.
The major energy policy overhaul establishes a new long-term planning process for traditional utilities as they continue to retire coal-fired power plants and consider replacements, increases renewable energy requirements, lifts a cap on efficiency incentives and largely retains the state’s limited “electric choice” program.
“This legislation will make it easier for our state to meet its energy needs while protecting our environment and saving Michiganders millions on their energy bills,” Snyder said in a statement. “I thank my partners in the Legislature for the bipartisan support of these bills that will help ensure a better and brighter future for all Michiganders.”
It’s not clear exactly how the new law will impact residential energy customers in Michigan, who now pay some of the higher rates in the country. But Snyder and other supporters have stressed the legislative focus on efficiency and energy waste reduction, potential cost-savings components the governor pushed for in 2012 and 2015 special messages.
Years in the making, the heavily-lobbied plan appeared to be running on fumes in the House as the 2015-16 legislative session neared a close, but Snyder stepped in to broker a lame-duck deal between traditional utilities and an energy choice coalition, which had sparred over various provisions.
Late revisions helped win over some reluctant Republicans who feared a proposed “capacity charge” on alternative energy suppliers that don’t invest in infrastructure could effectively kill the free-market choice program, which has helped a limited number of large manufacturers and schools save on their energy bills.
Michigan law allows alternative and out-of-state suppliers to provide 10 percent of Michigan’s electricity at unregulated rates. The new policy directs the Michigan Public Service Commission to determine whether an alternative supplier should pay a capacity charge to help maintain infrastructure largely funded by rate-regulated utlities.
The final plan passed the House and Senate by wide margins, winning bipartisan support in both chambers. It was celebrated by both alternative suppliers and incumbent utilities DTE Energy and Consumers Energy.
“With Gov. Snyder’s signature on energy legislation, Michigan has a clear path forward to an energy future that is reliable, affordable and cleaner,” DTE said in a statement, praising Snyder and key legislators on both sides of the aisle, including sponsoring Sens. Mike Nofs of Battle Creek and John Proos of St. Joseph.
“We look forward to working with the Governor’s office, the MPSC and the legislature as we move forward with our commitments to develop a modern, clean and affordable energy infrastructure for Michigan’s future.”
The new policy will require Michigan utilities to buy or produce at least 15 percent of their energy from renewable sources by 2022. The renewable portfolio standard, pushed by Democrats and environmental groups, builds on the 10 percent standard utilities already met in 2015.
The law also creates a new goal of meeting 35 percent of the state’s energy needs through waste reduction and renewable sources by 2025. It increases incentives for utilities to offer efficiency programs to their customers.
The final plan dropped a proposed charge for energy customers who participate in net metering programs, generating their own supply through solar panels or other renewable sources to add back into the grid.
Instead, the legislation tasks the Michigan Public Service Commission with developing an “appropriate tariff” for new net metering customers after determining whether their use of power lines or other energy infrastructure creates a significant strain on the system.
The energy policy proposal was fiercely debated in Lansing over the past two years. At least 145 registered lobbyists were involved in the fight in some way, according to a July report from the Michigan Campaign Finance Network.