State looks ahead 10 years with energy plan
(As seen on WZZM TV 13) In 10 years, what will Michigan’s energy needs be?
That is the question Michigan’s legislators and Gov. Rick Snyder are asking themselves as they prepare to enact the state’s next energy policy later this year.
Gov. Rick Snyder spoke about Michigan’s energy future last month, addressing the topics of affordability, reliability and environmental sustainability.
Since 2012, the governor pointed out, Michigan “met the 11th most aggressive renewable energy portfolio standard in the nation.”
Snyder attributed Michigan’s success to several factors, including collaboration, price reductions in energy technology, and utility and non-utility programs to reduce energy waste.
“In fact, our energy waste elimination is coming in at about a third of the cost of what we would pay to generate that power,” he said.
“Now it is time to propose a plan that will see Michigan through at least the next 10 years of energy decision-making,” Snyder said.
“During those next 10 years, Michigan will have to solve a shortage of electric generation. It will likely have to do that while complying with new federal regulations on carbon emissions. Our economy is expected to grow, and our infrastructure and natural assets will become even more important to our future.”
To achieve energy security for the state, Snyder has proposed a goal of meeting 30 to 40 percent of Michigan’s energy needs through renewable energy and waste reduction by 2025.
“He’s called for really addressing the energy waste,” said Nicholas Occhipinti, director of policy and community activism at the West Michigan Environmental Action Council.
“He calls for at least 15 percent more of Michigan energy needs coming from the elimination of energy waste over the next 10 years.”
So far the governor has not suggested any mandates attached to his plans, and Occhipinti said mandates are something he hopes to see in any final plan passed by legislators.
He noted the current law, Public Act 295, set to expire at the end of 2015, includes mandates and, in his view, has been very effective.
“Those standards have driven incredible economic growth,” Occhipinti said.
Occhipinti said the energy efficiency standards and renewable energy standards have pushed the state forward through important new investments.
Based on the 2008 law, 10 percent of the state’s energy is required to come from renewable sources by the end of 2015.
“All reports and indications are that it will happen this year,” he said.
Occhipinti is in agreement with Snyder that the state’s best investment toward its energy future is in focusing on eliminating energy waste.
“Energy efficiency is by far the cheapest, cleanest and most easily deployed source of energy to Michiganders,” Occhipinti said.
“We hear lots about the low price of natural gas right now, the plummeting price of wind, standards around coal — and that is all happening, but nothing can compete with energy efficiency at this point. The data bears it out in Michigan and nationally,” he said.
Businesses can certainly benefit from energy waste elimination. Some of the benefits are increased property values, decreased operating costs and a more comfortable environment for employees.
Michigan Public Service Commission released a report in February showing how Michigan’s renewable energy standard has impacted employment in the state.
The report pointed to findings based on the 2013 Energy Cluster Workforce Updates analysis conducted by the Michigan Workforce Development Agency and Bureau of Labor Market Information and Strategic Initiatives, which found the Energy Cluster grew from 6,775 jobs in 2005 to 8,200 jobs in 2013, and a 2014 analysis that suggests the overall Energy Cluster is expected to grow 7.1 percent between 2010 and 2020.
Occhipinti said the 2008 law is the driving force for the progress being made, and he is concerned any plan that does not include mandates for the future will dampen the momentum.
“This state law is the driving force for those energy efficiency investments, most of which come through the utilities: Consumers (Energy) and DTE,” he said.
In addition to Snyder’s plan, there are three other plans that have been introduced in some form in Lansing as a replacement to the sun-setting 2008 law.
Occhipinti said a plan introduced by state Democrats calls for an increase in the renewable energy standard from 10 percent to 20 percent by 2022, and raises the energy optimization standard to 2 percent.
Michigan Sen. Mike Nofs, chair of the Energy and Technology Committee, and Michigan Rep. Aric Nesbitt, chair of the Committee on Energy Policy, have proposed plans that would essentially allow the 2008 law to plateau without any new mandates related to the renewable energy standard and energy optimization standard.
Occhipinti said there has also been discussion around creating an integrated resources planning process. Utilities would present a plan for their portfolio of energy generation every three to five years.
“The idea is, through a planning process, you could find out what rises to the top in terms of reliability, affordability and cost,” Occhipinti said. “Presumably, if you had a fair, integrated resource planning process, because energy efficiency is so much cheaper it would rise to the top, as would clean energy.”
But Occhipinti is skeptical that integrated resource planning on its own is the right path for Michigan.
“Unfortunately, I think integrated resource planning on its own doesn’t exactly accomplish that, (based on) studies of how it’s happening nationally,” he said. “With something like a mandate for energy efficiency and renewable energy undergirding it, I think those two would complement each other very well. That would be something WMEAC would support.”
Currently, Occhipinti said the state government is pushing to have a detailed plan ready by the end of summer.
“This is setting the future policy for energy in Michigan,” he said.