DTE questions renewable proposal: ‘Why Michigan?’

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — DTE Energy Co. and Consumers Energy say they are already moving toward more renewable energy sources and argue a newly proposed mandate could hurt their ability to do so in the most cost-effective way for their Michigan customers.

A DTE Energy solar panel array along the north side of M-14 in Ann Arbor.

The Board of State Canvassers on Tuesday approved the circulation of a petition that would require electric providers to generate 30 percent of their supply from renewables like wind and solar by 2030, upping a current requirement of 15 percent by 2021 established under bipartisan legislation in late 2016.

“My first reaction was, why Michigan?” said Gerry Anderson, chairman and chief executive officer of Detroit-based DTE. “I am talking to the supporters of the ballot proposal, because I’ll be honest, I don’t think this is good for the cause of climate change or renewables in Michigan, and I’ve told them that.”

The Clean Energy, Healthy Michigan committee intends to use a combination of paid and volunteer circulators to collect at least valid 252,523 signatures to put its proposed initiative on the statewide ballot in November. The group will utilize funding from California billionaire environmentalist Tom Steyer’s NextGen America nonprofit.

“We want to expand renewable energy in a way that will promote economic development, create more jobs, continue to clean up our environment and promote better public health,” executive director John Freeman told reporters after board approval. “And of course save businesses, homeowners and farmers money.”

The proposal would require providers to generate 18 percent of their supply through wind, solar and other renewable energy sources by 2022, 21 percent by 2024, 24 percent by 2026, 27 percent by 2028 and 30 percent by 2030.

The petition drive comes less than two years after Gov. Rick Snyder signed an energy law setting a 15 percent by 2021 renewable target that will also require Michigan utilities to develop “integrated resource plans” to map out future energy-generation plans.

“Our long-term mix is going to include more renewables,” Anderson said. “It simply makes sense economically, and it’s the right thing to do as well.”

DTE recently announced plans to reduce its carbon emissions by 2050 as it continues to close coal plants and build new non-renewable natural-gas plants. The company has said it intends to increase renewable generation by a factor of six over that time period.

Anderson said 30 percent by 2030 is not impossible, but he argued that complex energy policy should be left to the state Legislature and suggested the proposal would strip DTE of the flexibility to invest in renewable energy when it makes sense for customers.

“You think about the right time and the right projects,” he said. “Sometimes the market is tight and prices aren’t right. A lot of judgments need to be made about how to do that affordably.”

Jackson-based Consumers Energy is already making “major investments” in renewable energy and plans to continue doing so, said spokeswoman Katie Carey. The utility is expected to file its long-term resource plan with state regulators by June and will “lay out our vision for the best electric-generation mix for Michigan’s future.”

“We do not need a legal mandate to do the right thing for our customers, Michigan and our planet,” she said.

DTE and Consumer spent a combined $24.1 million to defeat a 2012 ballot initiative that would have required 25 percent renewables by 2025. Voters rejected the measure, which failed 62 percent to 38 percent. Anderson said DTE is still evaluating how or if it will campaign against the new proposal if it makes the ballot.

Eighteen other states have a renewable standard higher than Michigan’s 15 percent by 2021 law, according to Freeman. The new proposal would provide “market certainty” for utilities and they would still have flexibility to meet renewable targets, he said.

“The concerns back in 2008 when the law was put in place is they were projecting it was going to cost a lot more than it did,” Freeman said. “The price of renewable energy, wind and solar, has come down so dramatically in the last 10 years that it is absolutely cost competitive with any other source of energy.”

Under the proposal, utilities could not charge residential customers more than an average of $2 per month to implement the renewable standard.

Electric providers could use municipal solid waste or landfill gas to reach the renewable requirement, but energy derived from pet coke, scrap tires, coal waste or other hazardous waste would not qualify.

Steyer’s involvement has turned heads in Michigan, where Anderson said he is concerned the outside funding will make renewable energy a divisive issue after recent consensus in the state Legislature.

“When you have a billionaire Democrat backing an initiative like this, it’s highly likely it becomes partisan,” Anderson said, “and I don’t think it’s good for the cause.”

Steyer, the wealthy founder of Farallon Capital investment firm and co-founder of OneCalifornia Bank, has supported similar ballot initiatives around the country and has become one of the nation’s most prominent clean energy advocates.

He is also reportedly organizing a campaign to try to impeach Republican President Donald Trump and has said his NextGen America super political action committee plans to spend $30 million this year to help Democrats take control of the U.S. House.

“He didn’t come into Michigan and say, ‘Hey, we’re going to change Michigan law,’” Freeman said, telling reporters that Steyer and local organizers spent months discussing the initiative they announced this week.

“He’s providing some funds and we’re going to build a broad-based coalition across Michigan,” Freeman said. “He’s made a lot of money and what is he spending it on? He’s spending it on promoting clean air and clean energy, so we think it’s a good partnership.”

The Board of State Canvassers on Tuesday also approved approved for circulation a “Promote the Vote” petition that would amend the Michigan constitution to allow no-reason absentee voting, same-day voter registration with proof of residency and more.

The League of Women Voters of Michigan, the American Civil Liberties Union of Michigan and the state and Detroit branches of the NAACP are helping organize that petition drive.

Kary Moss, executive director of the state ACLU, said the group intends to use a combination of paid and volunteer circulators and anticipates enough funding for a successful campaign.

“These are really commonsense reforms that most states already have,” Moss said. “…It’s intended to really make it easier for working families to participate in our democratic system.”