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.