Snyder urges dramatic drop in reliance on coal power

Gary Heinlein
Detroit News Lansing Bureau

Warren — Gov. Rick Snyder called Friday for a dramatic reduction in the use of coal for Michigan’s energy while setting a goal of meeting 30 to 40 percent of the state’s energy needs through renewable sources and efficiency measures within a decade.

The Republican governor envisions the state would move away from its reliance on coal-fired plants to meet its electricity needs by transferring increasing shares of its energy generation to natural gas or renewables such as wind power.

But efficiency — he calls it reducing energy waste — was the central theme of his message following a tour of a high-tech Warren training center of the International Brotherhood of Electrical Workers.

“It’s the cheapest, most reliable and cleanest,” Snyder said. “The most-affordable energy you can get is the energy you don’t use.”

The governor wants to eliminate the state’s 10 percent renewable-energy mandate, a disappointment to environmentalists, but would empower the Michigan Public Service Commission to push utilities more toward green energy and efficiency policies. He emphasized that he hopes “Michigan — not Washington, D.C. — will determine how we move forward, transitioning from the sources of yesterday to newer, cleaner methods.”

He also predicted the marketplace will dictate increased use of renewable energy along with natural gas as perhaps 10 Michigan coal-fired power plants are shuttered by stricter federal clean-air rules and age. Michigan currently generates 55 percent of its power from coal-fired plants, but Snyder sees it dropping to about 34 percent.

Snyder proposed to maintain the 10 percent current limit on energy competition — the other issue being hotly debated among Lansing interest groups. The state’s two electrical giants, Consumers and DTE Energy, have argued against forcing them to permit more outside bidders to go after their customers.

The governor wants a new law requiring outside competitors to file plans with the Public Service Commission proving they have the electrical generation capacity to meet the needs of all their customers for at least five years — a proposal he tabbed as “fair choice.” Until it’s completed and working, he said, the competition limit should remain where it is now.

Michigan-based utility companies are required to maintain generating capacity to cover their service areas “on a rolling five-year basis,” whereas outside competitors aren’t now, Snyder said. “Having a choice should not mean your expenses belong to everyone else,” he said.

In the weeks ahead, Snyder’s broad outline for Michigan’s next decade of energy policy will be debated in the Legislature, where Sen. Mike Nofs, R-Battle Creek, and Rep. Aric Nesbitt, R-Lawton, head committees forming energy legislation.

Nesbitt last week unveiled an eight-bill plan with similarities to Snyder’s proposals. The governor said he believes he and lawmakers “are on the same page ... but we use different terminology.”

Snyder said he’d like to see lawmakers pass a new state energy plan by the end of June.

James Clift, policy director for the Michigan Environmental Council, said the overall message was positive, despite Snyder’s “soft” plan for renewable energy. He agreed with giving the Public Service Commission a more direct role in forming energy policy.

“The utilities are supposed to serve all,” Clift said. “I do think it’s appropriate that you sometimes tell them what they need to do.”

Natural Resources Defense Council Midwest attorney Patrick Kenneally called Snyder’s goals for renewables and efficiency “a bold vision” and “massive step forward toward a healthier Michigan.”

But Greg McNeilly of the Michigan Freedom Fund, one of the groups hoping for an expanded competition mandate, said Snyder’s plan “missed the clearest answer to all the questions he raised: Open the electric market to increase competition, drive innovation, conserve power and deliver savings.”

Energy Choice Now Executive Director Wayne Kuipers said without an expansion of competition, 11,000 businesses, schools and residents who want to sign deals for lower-cost electricity won’t get the chance. Had choice not been limited to 10 percent last year, a quarter of the state’s energy users would have selected other providers and saved $265 million, he said.

Michigan’s utility rates are higher than the Midwest and national averages, according to the U.S. Energy Information Administration. Snyder said residents use 38 percent more energy than the national average and pay on average 6 percent higher rates on heat and electric bills.

The governor said Michigan’s electrical generating capacity could fall below industry standards in the coming 10 years, so he wants to move aggressively to avoid a problem. Snyder indicated he expects 15 to 20 percent of the state’s future energy would come from renewables.

Michigan gets 31 percent of its energy from nuclear reactors, 7 percent from natural gas and 5.8 percent from other renewable sources.

The accountant-turned-governor said the other 15 to 20 percent of energy would come through efficiency moves and set a goal of achieving them by 2025.

Snyder briefly touched on the controversy about using hydraulic fracturing to harvest Michigan’s plentiful but deeply embedded natural gas deposits. He said the state has fracked more than 10,000 wells without a serious problem and has new restrictions taking effect Wednesday that make it a “poster child” for protecting the environment while using the technology.

Environmental groups want stricter regulation of hydraulic fracturing, which pumps a water/chemical mix into shale formations beneath the surface to crack the rock and release natural gas. The process uses millions of gallons of water paired with horizontal drilling, but the drilling industry argues other accepted industries such as agriculture and power plants use more water.

Efficiency ideas

Examples from Gov. Rick Snyder on Friday on how to reduce “energy waste” in Michigan:

■Legislatively create programs that help homeowners replace old, less-efficient water heaters and furnaces.

■Encourage more widespread use of smart meters

■Promote “on-bill financing” – where energy-efficient retrofits in homes and buildings are repaid by consumers and companies through additional charges on their utility bills.

■Price electricity at lower rates during “off-peak hours” to give utilities and large companies an incentive to heavily use electricity then.

Source: Gov. Rick Snyder’s Office