After years of analysis and public input, months of hearings, and now weeks of political maneuvering, Michigan took a small step towards overhauling its energy policy last week when the House Energy Policy Committee approved its legislative proposal. Unfortunately, “E” for effort doesn’t cut it, and the proposal on the table falls short of what’s best for Michigan. The end result of this proposal would slow development of Michigan’s renewable energy and energy efficiency resources and do little to ensure the state achieves Governor Snyder’s goal of 40 percent of Michigan’s energy demand from renewables and efficiency by 2025.
Exchanging strong standards for complex and uncertain planning
The House legislation as currently proposed (there will be a chance for further amendments before final passage) would eliminate Michigan’s energy efficiency standard after 2018 and broaden the state’s definition of renewable energy to allow unsustainable biomass and Canadian hydropower to count towards meeting Michigan’s renewable energy standard.
In exchange for gutted clean energy standards, the proposal would also establish an integrated resource planning process that includes a non-binding goal of achieving 30 percent of Michigan’s energy demand with renewables and efficiency by 2025 and ratepayer-funded incentives for utilities to pursue energy efficiency.
In all, the proposal simply doesn’t go far enough to ensure that Michigan is achieving its potential to develop cost-effective renewable energy and energy efficiency resources. This equates to leaving consumer benefits on the table while potentially moving the state closer to an overreliance on natural gas and a more difficult road ahead when it comes to meeting its obligations under the federal Clean Power Plan.
Agreement on the direction we should head, but not on how we get there
There is no dispute at the Legislature that the state’s renewable energy and energy efficiency standards have worked. The renewables standard has driven nearly $3 billion in investments in Michigan, and utilities achieved the current 10 percent standard in less time and for far less cost to consumers than originally anticipated.
The market competition created by the renewables standard has helped drive the cost of renewable energy down to where it is now cost-competitive with other new generating resources (on a per kilowatt-hour basis). Under the efficiency standard, utility programs saved ratepayers over $2.5 billion between 2011 and 2015.
And the thing is that everyone (including the Michigan Agency for Energy) agrees that there is enormous untapped potential to develop more of Michigan’s cost-effective renewable energy and energy efficiency resources.
When Michigan’s renewable energy and energy efficiency standards have been so successful and have the potential to go even further, why replace them with non-binding goals, ratepayer-funded incentives, and a complex integrated resource planning process? When the evidence so clearly shows the direction we should be heading, why replace certainty with uncertainty?
Michigan should retain and strengthen its renewable energy and energy efficiency standards to ensure the state achieves at least 30 percent renewable energy by 2030 and at least 1.5 percent savings through energy efficiency programs each year. Both of these strengthened standards are achievable and would provide significant benefits to consumers, public health and the environment while putting Michigan on track to cost-effectively comply with the Clean Power Plan.
These strengthened standards would also drive significant investments across the state as renewable and energy efficiency industries ramp up to meet the challenge. Strengthened standards would truly put Michigan’s energy future in the hands of Michigan and would move the state towards certainty in achieving Governor Snyder’s goals of affordability, reliability, adaptability, and environmental protection.
The Michigan House is expected to finalize and vote on its energy legislation during the first half of December. Simultaneously, the Michigan Senate is expected to move forward with its own energy proposal.
Michiganders deserve certainty around their energy future and confidence that the state is moving towards a cleaner, more affordable and lower risk electricity supply. It would be a shame to let all the effort put in over the past several years to go to waste on energy policies that fail to do right by Michiganders.
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