Green energy saves money and generates jobs, so no need to change programs

Sens. Mike Nofs and John Proos say in their Aug. 20 Bridge column that Michigan should control its own energy future. At the Michigan Environmental Council, we share that view.

However, it’s disingenuous of the senators to claim their legislation reflects the consensus viewpoint of the 37-member work group that met throughout the past year to put together such a strategy. MEC was part of that group, and it’s clear to us that Senate Bills 437 and 438 instead represent a very narrow point of view – one mostly in line with our electric utilities.

Their sweeping legislation would eliminate Michigan’s wildly successful renewable energy and energy efficiency programs. Doing so would put the brakes on job growth and cost residents billions over the next decade.

The senators justify their proposal with an ideological opposition to mandates, but it’s worth remembering that our utilities enjoy government-granted monopolies. It’s only fair that Michiganders get to set some ground rules for how the utilities make their guaranteed profits. We require them to trim trees around power lines and meet strict electric reliability standards. It is not unreasonable to require them to reduce waste and use affordable, homegrown power.

Besides, MEC is less interested in ideology than in results, and mandates work. A recent study showed that states with mandates achieve nearly four times the energy savings as states without them. Before Michigan’s 2008 efficiency law, our utilities – whose traditional business model is to sell more electricity, not conserve it – did next to nothing to prevent waste.

That’s important, because you can’t beat energy efficiency for affordability. Meeting demand by saving electricity costs only a third as much as building a new power plant. For every dollar invested in these programs, we save nearly $4. In 2013 alone, Michigan saved $1 billion through energy efficiency.

Nofs and Proos argue that a revised version of the Integrated Resource Planning process alone – in which the public service commission evaluates all utility options for meeting future energy demand – would render mandates unnecessary. Their IRP proposal could be an improvement to our current process, but only if coupled with efficiency and renewable standards. IRP without mandates is like planning a trip with a road map but no destination.

They plan to replace our renewable energy standard – which requires utilities to generate at least 10 percent of their electricity from renewable sources – with a meaningless “clean energy standard” and a voluntary “green pricing” program. By their definition, a coal plant from the 1950s would be considered “clean” energy. The voluntary renewable program, meanwhile, would allow the utilities to charge extra for renewable energy – which makes little sense, since renewables are cheaper than new conventional power generation.

Michigan’s renewable energy standard is a good thing for our people and economy. Since it was enacted in 2008, it has driven down the cost of generating power and delivered $2.9 billion in new investments in Michigan. It’s also been a big job creator; our state added 3,600 clean-energy jobs in 2014 alone.

Clean energy also has tremendous benefits for public health and our environment. In addition to helping to stabilize our climate, Michigan will avoid 1,900 premature deaths between 2020 and 2030 by meeting new federal carbon reduction requirements.

The senators’ legislation also would eliminate Michigan’s successful net-metering program, which allows customers to generate solar power at home and sell it back to the utility to reduce their electricity bills. It would require participants to buy all of their power from the utility at retail prices, and sell back what they generate at the lower wholesale rate. That works out nicely for big utilities, which have a financial interest in controlling as much of the state’s power generation as possible. But it’s bad news for the rest of us.

Rooftop solar improves reliability and controls electricity rates, because solar power is most plentiful during hours of peak electricity use. For the many benefits they provide, Michiganders deserve a fair rate for the pollution-free power they produce.

Like the senators, we see these bills as a starting point, and look forward to continuing to work toward policy outcomes that do what’s best for Michigan residents.

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Comments

Fri, 09/11/2015 - 3:09pm
"you can’t beat energy efficiency for affordability" English at remediable level I suppose, but I digress. The issue with the current legislature is not where or how power is produced, but rather in the costs of distributing the stuff. In the previous paragraphs our author mentions "We require them (Consumers and Detroit Edison probably,) to trim trees around power lines and meet strict electric reliability standards." This sentence highlights the flaws intrinsic to solar and wind energy. These technologies are not reliable and so require coal and gas fired generators to be constantly active so as to take up the slack in the electrical needs of the private homes and businesses foolish enough to waste their own, but also taxpayer subsidy money on these private and costly "power plants" when winds die and the sun goes down. The real power companies are mandated to build lines going to these homes and businesses to deliver reliable power. But even more insulting, they have to pay these dilettante producers retail prices for any excess and unusable power produced that the contingent and unreliable green energy producer wants to squirt back via the lines that the same power companies built and own. In short, alternative energy producers are not money savers, else they would not need subsidies. And, if they want reliable back up power from the mains, they should pay for those lines just like the rest of us do for our regular power. If they made economic and also engineering sense, wind and solar could charge retail prices for feeding power into the mainlines, but since neither is the case, they should be content with whatever pittance is offered. Their contribution is really unusable power, and should be priced accordingly.
Duane
Mon, 09/14/2015 - 12:29am
I am struggling to understand why I don't have confidence in this article. Maybe because the article promotes the idea that efficiency, waste reduction, and all other aspects of the power grid comes from a regulation. The article seem to be about control rather then about people, it seems to be about money while ignoring how and why we have the structure we have, it seems about an answer without framing the problem, it seems to ignore so much. . What am I overlooking, what have I missed that I can't build confidence in the article? I believe strongly in the efficiency of systems, the elimination of waste, the value of improvement, but without confidence how can I support what the article promotes?
John Freeman
Mon, 09/14/2015 - 9:54am
I appreciate the column by Ms. Mulkoff. Renewable energy is cost effective because what you pay for is the solar and wind infrastructure and not the fuel cost because wind and sunlight is free. Whereas with coal, natural gas and nuclear you pay for infrastructure and fuel. As a state we export over $1 billion dollars per year to pay for coal that gets imported to generate electricity by the utilities. More and more large and small business are embracing solar energy because it is less expensive over the 25 lifetime of the solar panels and it enables business to better predict what their energy costs will be. Utilities should evolve their business model to work with local energy producers to help facilitate this energy transition because the market is moving towards distributive energy.
Hugh McDiarmid Jr.
Tue, 09/15/2015 - 1:43pm
More than a century ago we – as a nation and state – built out an incredible electric infrastructure that brought power, progress and modernity to almost all of America. That grid was primarily powered with coal, and our national, state and federal laws were tailored to encourage the build-out of that grid through myriad incentives and public policy structures that gave incentives – both direct, indirect, and in the form of public policy constructs – the help they needed to power up almost every home and business in the nation. These government incentives – Google “rural electrification” -- were necessary to bring power to the 90 percent of rural homes that did not have it in the 1930s. There was opposition – as there is today – to government competing with private industry in this arena. The policy structures and incentives that gave the utilities these advantages are largely still in place. That’s why we still have a quasi-monopoly in the electric market in Michigan, and why the utilities – in exchange for these goodies – agree to be publicly regulated. It also, IMO, is one reason why we’re never seriously considered repealing many incentives for the coal industry. Example: The costs of illnesses and premature deaths caused or exacerbated by conventional coal pollutants – which would significantly increase our utility bills – is instead shifted to our health insurance premiums. Now come the wind and solar industries in Michigan, seeking – by comparison – rather modest government help to establish a more diverse and stable electricity grid in the state. Recognizing that it is unfair to ask them to compete “on a level playing field” with a mature industry that has a century of incentives and government support behind it, we pass a law (’08) mandating a modest 10% renewable electricity. Howls commence. It will be too expensive. It will destabilize the grid. We’ll have to build backup nat gas plants for every wind farm. None of it. NONE OF IT happens. Instead, 10% wind has been integrated seamlessly into the regional power grid; the price of wind drops like a rock and the special (and terribly unfair) “surcharges” on our bills go away; a burgeoning new industry gains a foothold in Michigan; and the accompanying energy efficiency program reduces bills for commercial, industrial and residential customers. The tired old assertions, many of them repeated above, simply aren’t true. They were all trotted out in 2008, and here they are again! The sun has set every single day since 2008, and our grid remains reliable due to a smart mix of power sources and regional load management. Governor Snyder’s own task force concluded there is ample room to triple renewable electric generation before we reach the point where reliability becomes a factor. We long ago established our large utilities through a privately-operated, publicly-regulated system. That’s the structure we operate within. If you want to dismantle the public regulation of all utilities and re-establish a true “free market,” Good luck, have at it. But if you want to prohibit the renewable energy industry from playing on the same field as the large fossil fuel utilities then it’s just hypocrisy.
SM
Thu, 09/17/2015 - 10:22am
I have to commend Hugh McDiarmid, Jr. - well said. Please keep hammering your message as every day I see these commercials about Consumer's Energy and pushing the Senate Bills that will no doubt be a disaster. Solar is here. It is not going away. If Michigan Legislature goes backwards and passes law that makes Solar and Wind impossible to implement in Michigan, we all know it will be elsewhere and all that business will be lost. I am moving to solar myself - it is a no brainier. I also bet it scares the heck out of the Utilities -- but for Michigan Society having a small Solar/Wind Power Plant everywhere on roofs and elsewhere is just smart....it really comes down to Ostrich - stick your head in the sand like the Utilities want to or more forward. Why is Michigan always moving backwards and never, ever, ever on the cutting edge? Probably because of the Legislature is dysfunctional.
Eric lipson
Tue, 09/22/2015 - 8:40am
To find Senator Proos real motive one should look no further than his list of contributors of whom DTE and the energy industry is the largest