Opponents say energy bills would benefit utility companies
LANSING — A pair of Senate bills would shift the state’s focus away from renewable energy to the benefit of large utility companies — and Michigan’s budding renewable market could be left out in the cold, according to opponents like the Sierra Club.
“Essentially, these bills would destroy our current system of supporting renewables, efficiency and all the things that make our energy portfolio cleaner and more sustainable,” said Mike Berkowitz, staff political director of the Michigan Sierra Club’s Political Committee. “The bills would eliminate Michigan’s renewable energy standard, sunset our energy efficiency standard and gut our net metering program, which would essentially destroy the solar industry in Michigan.”
But the chair of the Senate Energy and Technology Committee, Sen. Mike Nofs, R-Battle Creek, said the plan would instead make Michigan’s energy market more competitive and fair, without the state giving certain types of power generation preferential treatment. He and the committee’s vice chair, Sen. John Proos, R-St. Joseph, sponsored the bills.
“We don’t want to pick what fuels are going to work, which fuels are most cost-effective and all that,” Nofs said. “When you have mandates, you’re tied to that energy source no matter what it costs, and as we’ve seen with wind, and with solar, they’ve had some downfalls. But we did what the 2008 legislation wanted to do — get that economy of renewables going.”
The plan would alter a 2008 law that introduced a mandate requiring utilities to generate at least 10 percent of their electric load from renewable sources by the end of this year, and remain at a minimum 10 percent in years that follow. It includes another mandate for efficiency.
Introduced in July, the bill is undergoing hearings in the committee.
Meanwhile, the House Energy Policy Committee has approved different legislation that would provide incentives for utilities that hit annual waste reduction benchmarks and introduce a goal of 30 percent renewable energy production by 2025. That measure now goes to the full House for a vote.
The Senate proposal would eliminate renewable and efficiency mandates. Incentives to utilities exceeding renewable and emission requirements would also be significantly reduced.
“Now, let everybody compete,” Nofs said.
Jim Weeks, executive director of the Michigan Municipal Electric Association, said the mandates have already served their purpose. The association represents 40 city-owned and village-owned utilities, including ones in Sturgis, Holland, Traverse City, Harbor Springs, Marquette, Charlevoix, Petoskey, Lansing, Lowell and Hart.
“All this does is take away mandates, but we’re already at the 10 percent,” he said. “We’re going to invest more in renewables going forward, but that’s going to depend on the price of renewables, and make sure that renewable fits into your existing generation portfolio.”
Nofs said mandates hurt Michigan’s ability to compete with other states.
“If we mandate that stuff and other states don’t, they’ll be able to say, ‘Well, Michigan’s 12 cents and we’re 4 cents,’” he said. “And other states aren’t doing this; they’re getting rid of their mandates.”
Energy tends to be more expensive in states with renewables mandates — an average of 10.5 cents/kilowatt hour compared to 7.5 cents in those without mandates, according to the Institute for Energy Research in Washington, D.C.
But the number of states adopting mandates is growing, not shrinking. According to an institute study, 30 states have renewable or alternative energy mandates. Another six have renewable energy goals.
“With the federal requirements and the Clean Power Plan” (from the Environmental Protection Agency), “I know the utilities are already invested in renewables and efficiency,” Nofs said.
The Clean Power Plan requires states to significantly reduce carbon emissions from utilities by 2030. While it doesn’t set requirements for the type of generation utilities can use to meet the goal, renewables create little to no emissions and could offset less efficient sources, like coal.
Nofs predicted that utilities would pursue renewables, even without a mandate.
“Whatever that renewable may be — it may be something we haven’t thought of that’s even better than what we currently have,” Nofs said. “Why keep buying this if there’s something that comes out in the future that’s cheaper, easier to use, better for consumers? Why would I say you still have to buy wind and solar?”
The 2008 law defines renewable energy as resources that naturally replenish over a human timeframe, including biomass, solar and solar thermal energy, wind, hydroelectric, geothermal energy, municipal solid waste and landfill gas produced by waste.
Nofs said the plan’s focus is “clean” energy and efficiency over renewables.
“I’m a firm believer that energy efficiency is a good way to go. If you don’t have to build it, it saves all of us money,” he said. “If I invest a little bit more in energy efficiency, then we don’t have to build another plant, let’s say.”
However, Nofs’ plan would eliminate current efficiency mandates by 2019, according to the bills’ Senate analysis.
The Sierra Club’s Berkowitz said eliminating mandates is a step backward.
“When you compare states that have mandates and states that don’t, the states with mandates end up generating and producing a lot more renewables,” he said.
The bill also has hazy definitions for “clean,” said Berkowitz.
“They would redefine ‘clean energy’ to include dirty and polluting and unsustainable forms of energy,” Berkowitz said.
Other critics of the legislation include the West Michigan Environmental Action Council and the national Union of Concerned Scientists. The University of Michigan Health System and Michigan Farm Bureau also gave testimony against the plan.
Supporters of the proposal include Consumers Energy Co. and DTE Energy, as well as the Michigan Municipal Electric Association.