Column: Energy initiative restricts choice
Clean Energy, Healthy Michigan, a citizens ballot campaign, has recently publicized its plan to force Michigan to produce 30 percent of its electricity with renewable sources by 2030. The group, backed by California-based financier and environmental activist Tom Steyer, calls the requirement “30 by 30.” The effort effectively resurrects the “25 by 25” proposed constitutional amendment that attempted to force a 25 percent renewable mandate on the state but was rejected by 62 percent of voters in the 2012 election. The 30 by 30 idea points Michigan energy policy in the wrong direction by preferentially benefiting a select few industries, restricting electricity choice and increasing electricity prices.
The campaign heavily relies on the notion that forcing Michigan to use renewable energy will lower energy bills. If we were in another state – like Iowa – claims of decreasing prices would be more accurate. But in Michigan, wind energy prices have stayed essentially constant since 2012, and well above prices seen in other states. A contract signed by DTE and Pine River Wind Engineering commits DTE to purchasing electricity from the Pine River wind park, near Alma, at 2011 prices, with a wholesale price of almost $60 per megawatt-hour.
Compare Michigan’s $60/MWh wind prices to the $20 per MWh contracts being signed in Iowa and Oklahoma and you’ll see that Michigan is paying as much as three times more for its new wind power. Maps produced by the National Renewable Energy Labs show that the average wind speeds in a location make all the difference. They demonstrate that the worst wind resources in some Great Plains states are as good or better than Michigan’s best wind resources.
In fact, the only areas in Michigan with wind speeds comparable to the plains states are at the tip of the Michigan Thumb region, or over the Great Lakes. But in 2017, voters in the Thumb resoundingly rejected plans to build more wind – 63 percent of voters were against proposals to build more wind, saying additional turbines would damage their quality of life.
As for attempts to build offshore wind in the Great Lakes, they would likely be dead on arrival. Plans for wind developments in Lake Michigan were considered and dropped in 2009 and 2010 because of cost, maintenance, safety, and environmental concerns.
Clean Energy, Healthy Michigan campaigners also must address a decided lack of interest on the part of Michigan’s monopoly utilities, DTE and Consumers Energy. While both utilities could potentially make handsomeprofits building additional wind generation assets, they immediately went on record as being opposed to upping the renewable mandate.
Michigan passed legislation less than two years ago that increased its renewable mandate to 15 percent by 2021. Gerry Anderson, CEO of the energy utility DTE, noted that upping the mandate again would not be good for the “cause of climate change or renewables.” He also argued that electricity markets in Michigan would be burdened by the mandate.
In response to its critics, Clean Energy, Healthy Michigan representatives contend that, if passed, the expanded renewable mandate will “promote economic development, create more jobs, continue to clean up our environment and promote better public health.” But renewable energy mandates take tax dollars and raise utility rates on everyone to promote the interests of selected industries. Those funds are then redistributed to renewable energy developers, utilities and wind/solar leaseholders, an action that hurts many to help a limited few.
Renewable energy mandates rely on the force of government to twist electricity markets into a predetermined shape. In doing so, they reduce flexibility by committing the state to specific energy resources, on a specific timeline. These mandates stifle markets, stop innovation, and restrict customer choice, keeping people from choosing what energy they want, and when (or how) they want it.
The 30 by 30 ballot initiative would take Michigan in the wrong direction. Energy policy should instead strive to open up competition, reduce prices and prioritize innovation by removing mandates.
Jason Hayes is director of environmental policy at the Mackinac Center for Public Policy.