Michigan Legislature passes energy bills
LANSING — The Michigan Legislature has approved a re-write of state energy laws, voting on the final day of the two-year term yesterday to boost the required use of renewable energy sources and to keep intact some competition in the electricity market.
The bills, which passed 79-28 and 76-31 with bipartisan votes in the House, then cleared the Senate 33-4 at night.
Republican Gov. Rick Snyder will sign the legislation, which has been one of his top priorities at a time when many coal-fired power plants are closing.
"Michigan has now defined a platform for us for the next few decades," the happy governor told reporters at the Capitol after pulling an "all-nighter" to broker a deal. "It's a path that I think is very strong and thoughtful....We hope to see a replacement of very old capacity that is being retired and put in place things that can really help bring down cost long term."
Republicans who control the House had long been at an impasse on an overhaul of 2008 energy laws, until changes were made to mollify proponents of the "choice" program that gives competitors up to 10 percent of sales in the territories of regulated utility giants DTE Electric and Consumers Energy.
Starting about 4 a.m. Thursday, Snyder briefed House Republicans on what was the framework of an agreement for more than an hour to cap what had been a nearly 20-hour session. Tired members then broke until the afternoon, finally passing the heavily lobbied, highly complex bills after negotiators had more time to review draft legislation.
The major utilities and interests with which they had had differences both applauded the legislative action.
The bills would enact the following:
- Require electric providers to produce 15 percent of their power from wind or other renewable sources by the end of 2021, up from 10 percent now. The Michigan Environmental Council called the legislation a "vast improvement over earlier proposals" that would have eliminated any mandate for clean energy.
- Set a non-binding goal of meeting 35 percent of Michigan's power needs by 2025 through a combination of renewable energy and energy conservation.
- Keep intact, at least through 2021, a requirement that utilities save a minimum amount of power each year with efficiency programs but also boost incentives for utilities that hit higher targets. "That is going to save a significant amount of money for businesses and homeowners across the state as they use less and less energy because their homes and their businesses are retrofitted to be able to manage their energy costs much better," said Rep. Sam Singh, an East Lansing Democrat who also touted the higher green power requirement.
- Detail how state regulators would set capacity charges that customers of alternative suppliers, which supply the power through the utilities' distribution systems, could have to pay to help meet peak reserve margins. A coalition of major companies and school districts that now buy in the choice market said it secured "guardrails" if a Public Service Commission process is used instead of one through a regional transmission entity.
- Specify that if customers return to their home utility, they could not go back to a competitor for six years. Because the 10 percent limit has been reached, more than 11,000 Consumers and DTE customers are in a queue waiting to buy from competitors. The legislation specifies that if market conditions change, competitors lose customers in mass to the utilities with no new customers to take their place and choice falls below 10 percent, that new ratio would become the cap for six years.
"This is a big win for our friends and neighbors and hometown residential ratepayers across the state and it's a win for in-state Michigan energy," said House Energy Policy Committee Chairman Aric Nesbitt, a Lawton Republican. "Everybody gave a little to produce what I think is a good long-term energy package."
- Not apply, for now, a "grid" charge to new customers participating in a net metering program, instead requiring a study to determine an appropriate fee. These are residents and businesses with their own wind turbines, solar panels or other types of renewable sources that reduce their electric bills.