Senate panel approves energy policy overhaul
Lansing – A Michigan Senate panel on Wednesday approved sweeping legislation to rewrite the state’s energy policy, moving away from renewable energy mandates and toward goals and new requirements for alternative “choice” suppliers.
The Senate Energy Committee approved the policy overhaul, motivated by aging coal plants and federal regulations, in 6-1-3 and 7-0-3 votes. Democrats abstained while urging additional changes on the floor.
The proposal has been opposed by environmental groups and some free-market advocates but is supported by major utilities and the Snyder administration.
“When we look at what’s coming … we believe these bills put us in a better position to make decisions that make us more adaptable, more affordable, more reliable and more protective of the environment,” said Valerie Brader, executive director of the Michigan Agency for Energy.
The Senate plan, like a version advanced last year to the House floor, would repeal a 2008 mandate that utilities generate 10 percent of their electricity from renewable sources by 2015, a requirement they met.
Instead, the legislation would create a statewide goal of meeting 35 percent of all energy needs through a combination of renewable energy and “energy waste reduction” by 2025.
The 35 percent goal, up from the 30 percent proposed in the House package, is a blended option that supporters say would give utilities more flexibility to meet energy needs.
“We don’t want to pick any more – renewables you’ve got to do, you’ve got to do energy waste reduction – we want anything to be able to compete going forward,” said sponsoring Sen. Mike Nofs, R-Battle Creek, who chairs the energy committee.
Sen. Hoon-Yung Hopgood, D-Taylor, said the renewable energy issue was one of the main reasons Democrats chose not to vote on the bills in committee. He proposed an amendment that would have raised the 10 percent renewable requirement to 15 percent.
“We need to be building upon (the 2008 mandate), and we’re not,” he said. “We’re actually taking a step back in some respects.”
An amendment adopted Wednesday would treat the 10 percent mandate as a “floor” for utilities when filing an “integrated resource plan” for investments in new energy sources, but Hopgood called the process “convoluted.”
A handful of environmental groups also criticized potential elimination of the renewable energy mandate and said the Nofs plan would weaken energy efficiency standards.
“Michigan needs an energy plan that cuts costs and reduces pollution with strong renewable energy and energy efficiency standards so Michiganders can breathe clean air and save money,” Mike Berkowitz of the Sierra Club said in a statement.
The legislation has also faced some opposition from conservatives because of provisions that would modify the state’s electric choice program, which allows alternative and out-of-state suppliers to provide 10 percent of Michigan’s electricity at unregulated and typically less expensive rates than traditional utility customers.
The Senate plan would maintain the 10 percent cap, but would require alternative suppliers to prove they could generate or buy enough energy in the future and impose a new electric generation service charge on customers who move into the choice market.
“We’re deeply disappointed that members of the Senate Energy and Technology Committee put two massive electric utilities above the needs of their constituents, schools, and employers,” Michigan Freedom Fund President Terri Reid said in a statement. “Eliminating electric choice means abandoning free-market principles, raising prices on schools and job creators, and sticking Michiganders with hundreds of millions in higher rates on their electricity.”
Supporters say the electric choice changes would ensure the state meets future energy needs while helping utilities invest in new energy generation sources.
Patti Poppe, president and CEO-elect of Consumers Energy, noted recently closed coal plants and said choice providers could soon purchase more electricity than is actually available, which could lead to service interruptions for utility customers in Michigan and beyond.
“I just ask you to consider the headline: Michigan causes blackouts across the nation. That is another infrastructure crisis that Michigan cannot afford,” Poppe said.
She urged quick action on the energy overhaul bills, comparing the status quo to a warning light on the dashboard of an automobile.
“This particular light on our dash is not the kind of light where you can pull over, pop the hood and drop a quart of oil in. This light is a light that requires advance planning.”