Government and Sustainability

Pulling the plug?

Environmentalists, businesses unite against energy bills currently in Michigan Senate.

June 3, 2016
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(As seen on WZZM TV 13) Several businesses and environmental organizations say a pair of energy bills before the Michigan Senate would kill electric choice and remove mandates that have been crucial to Michigan’s renewable energy and energy efficiency gains.

The opposition is aimed at Senate bills 437 and 438, introduced by Sen. Mike Nofs, R-Battle Creek.

The bills would update Michigan’s 2008 energy law, which set a 10 percent renewable energy mandate to be achieved by 2015 and an energy efficiency standard that increased by 1 percent of total energy annually. They would also change requirements related to Michigan’s electric choice law, which currently allows up to 10 percent of utility customers to shop around for their energy, while guaranteeing utilities like DTE and Consumers Energy at least 90 percent of energy sales in their markets.

Opponents say additional regulations in the bills would make it too difficult for alternative suppliers to compete, pushing choice customers back to the major utilities.

The Grand Rapids Chamber of Commerce says it wants to see legislation that preserves a “true 10 percent choice market.”

“We like the competitive market pressures, and we like the benefit the choice market brings to Michigan, and we want to see it preserved,” said Josh Lunger, director of government affairs for the Chamber.

Lunger said the organization believes the way the legislation is written, it will eventually kill choice.

“The amendments we are supporting and that we’ve suggested are designed to provide greater protections to ratepayers and to find compromises on electric choice that would address some of the concerns people have, but will preserve that competitive market and its viability going forward,” he said.

He said the Chamber would particularly like to see guidelines for the Michigan Public Service Commission, which would be given oversight regarding utility rate changes.

“Giving them broad authority is concerning,” he said. “You want guidelines set out.”

Bryan Harrison, government affairs manager at Ada-based Amway, said his company also opposes the legislation.

Amway has purchased its energy from Cadillac-based alternative energy supplier Wolverine Power Cooperative since 2000.

“We get 20 percent of our energy from renewable Michigan-based wind energy,” he said. “Because of this freedom to shop, we save hundreds of thousands of dollars a year based on this ability to have competitive energy markets.”

He said Amway’s contracts with private energy producers allow for greater price predictability.

“We are able to get long-term pricing commitments from our supplier. You are not able to do that with the monopoly utilities,” he said.

In turn, the company is better able to meet its sustainability goals.

“We’ve been able to contract long term for renewable energy, and our Ada facility will be at 20 percent renewable energy, and our downtown hotels will be at 50 percent renewable energy next year, again based on this ability to contract privately for that energy,” he said.

“If Michigan is trying to maintain itself as a place where we can make things and sell them around the world, which is what Amway does, then this bill is bad news,” he said.

Environmental organizations say the bills threaten renewable energy and energy efficiency progress.

Nick Occhipinti, director of policy and community activism at the Grand Rapids-based West Michigan Environmental Action Council, said the new legislation would end the current energy efficiency standard after four years.

Occhipinti said WMEAC would like to see the standard increased to an additional 1.5 percent a year through 2025.

“We want the state of Michigan to promise they will pick up every dollar available for energy efficiency,” Occhipinti said. “They can do this by continuing the standard and expanding and increasing it.”

The proposed legislation also would replace Michigan’s renewable energy mandate with a different 10 percent standard that would not apply to all providers.

The new requirement “only applies to the two major utilities, or about 80 percent of the load,” Occhipinti said. “It does not apply to municipal utilities or co-ops. So, in effect, it would be less than 10 percent of the statewide load.”

He said clean energy in Michigan accounts for 8,700 jobs and $5 billion in annual economic activity, and without a mandate on renewable energy the industry is in jeopardy.

“We think this legislation will harm the industry and send jobs to other states,” he said.

Occhipinti said a comparison of projected demand with and without mandates equates to $4 billion over the next decade for ratepayers in Michigan.

“Without a standard, we will need more capacity,” he said. “We will need to build new facilities to generate more electricity. That costs ratepayers more money.”

He also said a piece of that $4 billion would come from the loss of federal tax credits for renewable energy.

Occhipinti said he hopes to see a compromise that will encompass renewable energy and energy optimization mandates.

Several health care and educational organizations also have opposed the legislation.

Educational institutions point to the savings they’ve achieved through choice and fear the new plan will hurt their already tight budgets.

“The Nofs energy bills threaten to raise costs on school districts to the tune of more than $15 million every year,” said Ray Telman, secretary treasurer of the Michigan Schools Energy Cooperative, which works with 275 school districts serving 541,000 students across Michigan.

The health care community points to pollution concerns.

Kindra Weid, a registered nurse with MI Air MI Health, said the bills “set the stage for more dangerous pollution entering our air, which causes serious health problems.”

Nofs has said the legislation helps ensure electricity reliability and improves planning.

Co-sponsor Sen. John Proos, R-St. Joseph, said previously that the Legislature should not “pick winners and losers.”

“Instead, we should establish the goal of having cleaner sources of electric generation that reduce emissions, and then let the process determine which options best meet our needs. Michigan ratepayers have helped prime the pump for these new technologies since 2008. Now it’s time for them to compete head-to-head.”

The Senate could vote on the energy bills this week.

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