Government, Manufacturing, and Sustainability

Michigan Senate passes energy bills

November 11, 2016
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John Proos
John Proos. Courtesy Michigan Senate

Despite strong opposition from businesses and environmental organizations, the Michigan Senate has passed a pair of energy bills introduced by West Michigan legislators.

Bills SB-437 and SB-438 passed yesterday. The Michigan House of Representatives is expected to take up the bills next month.

They were introduced by Sen. Mike Nofs (R-Battle Creek) and Sen. John Proos (R-St. Joseph) and include provisions related to electric choice and renewable energy and would replace energy legislation enacted in 2008.

The plan calls for a number of key reforms: require utility companies to competitively bid for new-generation projects; require providers to follow strict rules to ensure they have enough energy to meet demand; alter electric choice requirements; incentivize energy-waste reduction programs; increase the Renewable Energy Portfolio Standard to 15 percent by 2021; and create a statewide goal of 35 percent of resources derived from renewables or energy-waste reduction.

Nofs said the proposed energy policy “balances a broad and often widely disparate range of interests.”

“This legislation is not about what’s best for a few companies, organizations or individuals — it’s about what’s best for the entire state of Michigan,” he said.

Businesses and environmental groups have been opposing the bills vigorously for the past two years.

Energy Choice Now, a group of businesses opposing SB-437, said in a statement the bill would effectively “kill electric choice” in Michigan and “cause electric rates to rise for everyone.”

“SB-437 passed despite an amendment offered by Sen. Peter MacGregor that would have increased reliability, while protecting MI ratepayers and saving the 10-percent electric choice market, which has saved Michigan schools and job creators hundreds of millions of dollars,” the organization said.

Wayne Kuipers, Energy Choice Now executive director, said the Senate voted in favor of the bills, despite opposition from Kellogg, US Steel, Pfizer and the Michigan Manufacturers Association, which represents 2,500 Michigan employers.

“The question is who are Senate leaders listening to, if not Michigan’s most important companies, the bedrock of our state’s economy,” he said.

The Grand Rapids Area Chamber of Commerce also has vocally opposed SB-437.

“The chamber strongly opposed these bills that will lead to higher electricity costs for Michigan citizens and further raise already uncompetitive electric rates. Michigan rates are currently the second highest in the Midwest and have increased steadily since the last energy law was passed in 2008,” the chamber said in a statement.

Rick Baker, president and CEO of the Grand Rapids Area Chamber of Commerce, said the bill’s passage was “extremely disappointing.”

“The Senate just voted to increase the cost of doing business in Michigan and take dollars out of the classroom,” Baker said.

Not everyone opposed the bills, however. Michigan utilities Consumers Energy and DTE Energy have been calling on legislators to support SB-437 and SB-438, because they say reliability is at stake as coal plants are retired.

“We commend the state Senate's vote today to approve an updated energy law for Michigan,” Consumers Energy said in a statement.

“A Michigan-first energy policy is essential to ensure electric reliability, as the state faces the retirement of 35 coal plants by 2025. Michigan families and businesses deserve legislative action, which protects electric reliability, ensures energy affordability and promotes clean energy and energy-waste reduction,” Consumers Energy said.

Environmental groups remain concerned with SB-438 as well.

“The energy bills represent a step in the right direction toward reducing dangerous pollution, by expanding clean, renewable energy, but they need improvement,” said Jack Schmitt, deputy director, Michigan League of Conservation Voters.

He said while the bills increase the renewable energy standard, there is still “much more work to be done” to make sure “our energy policy reduces pollution and lowers electricity costs for Michigan ratepayers.”

James Clift, policy director for the Michigan Environmental Council, said the bills are an “incremental improvement” in terms of renewable energy, but they should do “much more to reduce electricity costs and protect public health.”

“Further expanding renewable energy will lower electricity costs, create jobs and improve public health,” Clift said. “Michigan should be a leader on clean, renewable energy, and our energy policy has a long way to go before that happens.”

Business and environmental groups said they will continue to oppose the bills and encourage House representatives to add amendments that will “protect Michigan ratepayers and preserve electric choice.”

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