Michigan moves toward renewable power goal
Lansing — Michigan is headed toward no longer requiring utilities to generate a portion of their power from wind or other renewable sources because Gov. Rick Snyder and lawmakers instead favor setting a goal — not a new mandate.
The debate is among a number of significant issues confronting legislators trying to update energy laws this fall.
Some questions and answers about the green power issue:
What is a renewable energy standard?
A 2008 state law requires electric providers to produce 10 percent of their power from renewable sources by the end of 2015. All are on pace to do so. If the law is not changed, the 10 percent standard will stay intact in 2016 and beyond.
Why require wind, solar?
The primary reason for mandating more wind turbines and solar panels is environmental: to cut Michigan’s reliance on coal-fired plants that are the leading source of greenhouse gases warming the planet. Also, the cost of renewable sources is competitive and trending downward, partly due to tax incentives but also the federal government’s anti-pollution regulations. The retirement of coal plants — the state will lose nine coal units at four factories by the end of 2016 — means power must come from elsewhere.
What do lawmakers, Snyder want?
The Republican-led House Energy Policy Committee this month voted 18-7 for a bill that would set a non-binding goal of meeting 30 percent of Michigan’s electricity needs by 2025 through a combination of renewable energy and energy efficiency. The GOP governor, who has called for a 30 percent or 40 percent target depending on whether renewables are cheaper than another power source — natural gas — supports the legislation.
Should the target be higher?
Environmental groups think a 40 percent-by-2025 goal is doable. The bill contains a provision providing sweetened financial incentives for utilities that reduce power use by 1.5 percent a year (the current requirement is 1 percent). If power providers hit 15 percent efficiency savings over a decade through appliance rebates and other energy-savings programs, the bill effectively calls for a net 5 percent gain in renewables, according to clean power advocates. “We think that number is too low. We think we both can do better and it’s actually good for ratepayers and good for economic development in Michigan to go beyond that point,” said James Clift, policy director for the Michigan Environmental Council.
Why no requirement?
President Barack Obama’s plan to reduce power plant carbon emissions “will by necessity drive more renewable energy investment and expansion in Michigan, obviating the need for a state mandate,” said Consumers Energy spokesman Dan Bishop. He said the 30 percent target is reasonable. Snyder has said he prefers a goal so Michigan can adapt to changes in the price of electricity. Free-market conservatives oppose mandates in general and say they are not needed because the legislation would require more robust long-range planning by regulated utilities.
What is the cost?
Under the law, utilities can assess a stand-alone $3 monthly surcharge on residential customers to meet the mandate to sell cleaner power. Those fees were eliminated by Consumers Energy in 2014 and will go away for DTE Energy customers in January. Michigan Public Service Commission Chairman John Quackenbush attributed the decisions to the falling cost of wind-generated power, though utility officials say the higher cost of renewables has been rolled into base rates. DTE and Consumers also no longer have separate $17 monthly fees for smaller businesses and roughly $188 for industrial users.
Snyder is hopeful that energy legislation is approved by year’s end. The House is expected to consider the bills when the Legislature returns to session in December. A Senate panel also has been working on legislation. It is doubtful that lawmakers will be able to pass a rewritten energy law in just nine session days.