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Pro-Proposal 3 ads earn foul from Michigan Truth Squad

MICHIGAN TRUTH SQUAD ANALYSIS: Pro-Proposal 3 ads "Choice" and "Afford"

Who: Michigan Energy, Michigan Jobs

What: TV/Web ads

Truth Squad call: Foul

Proposal 3 would create an amendment to the Michigan Constitution a requirement that 25 percent of the state’s electrical power come from renewable sources by 2025, with certain caveats.

The primary proponent group for Prop 3 is Michigan Energy, Michigan Jobs. As of the July reporting date, it had raised $2.2 million, most of it from out of state environmental groups.

The primary opponent is CARE – Clean Affordable Renewable Energy for Michigan Coalition. As of July, it had raised nearly $6 million, almost all of it from the two major utilities – Consumers and DTE.

Ballot committees will report again to the state on their finances at the end of October.

Questionable statement: "This year, Michigan voters have a choice: Keep burning dirty coal and oil or move Michigan to clean, renewable energy." (Choice)

The choice ad paints Prop 3 as a choice to "keep burning" dirty coal or vote to pass a much cleaner energy system. Problem is, we’ll "keep burning" coal and other carbon-based fuels, with or without Prop 3. Coal is Michigan's primary power source. Even if Prop 3 passes, 75 percent of Michigan energy is going to come from coal and other traditional sources. It’s misleading to voters to make them think passing this proposal makes Michigan a completely clean energy economy.

Questionable statement: "And Proposal 3 protects consumers by prohibiting utility companies from raising rates more than one percent. (TEXT ON SCREEN) 'To protect consumers, compliance with the clean renewable electric energy standard shall not cause rates charged by electricity providers to increase by more than 1% in any year. Source: Actual Proposal 3 Language, Michigan Dept. of State.'" (Afford)

The verbal claims in the ad, as well as the out-of-context half-quote on the screen of the ad, are highly misleading. In effect, this ad paints Proposal 3 as a consumer protection ballot issue. Proposal 3 actually states that it would "limit to not more than 1 percent per year electric utility rate increases charged to consumers only to achieve compliance with the renewable energy standard." (emphasis added) In other words, utility rates, in general, will continue to be governed by the Public Service Commission process.

The nonpartisan Citizens Research Council of Michigan says in its analysis that "... it is likely that the cost of electricity in Michigan will increase over the next 10 to 12 years with or without adoption of the proposed amendment."

Questionable statement: "Studies show renewable energy would reduce the cost of your utility bills." (Afford)

The ad cites a study by the Michigan Environmental Council, a backer of Prop 3, for the cost claim. The report says that by calculating the cost of renewable power based off of recent contracts let in Michigan and subtracting sums saved by reducing the use of fossil fuels and the plants that use them, Prop 3 would result in a neglible cost to residential ratepayers.

Prop 3 opponents hotly contest those calculations.

All of the cost projections are based on many assumptions. But the ad makes no reasonable disclaimer that the proposal "could, based on projections," reduce energy costs. The claim is stated as fact. It’s simply not that simple.

Even the MEC report touted by Prop 3 proponents presents a two-step process on consumer costs.

First bills go up: "Over the decade of 2016 to 2025, electric rates in Michigan would average 0.5% (one-half of one percent) higher under the proposed 25% renewable energy standard than under the current 10% standard. Between 2016 and 2025, monthly electric bills of a typical residential utility customer would be higher by an average of about 50 cents per month."

Then they would go down: "Proposal 3 would put long-term downward pressure on rates After the initial investments over the first ten years, renewable assets with zero fuel costs would put downward pressure on rates starting around 2027. By 2030, the higher renewable standard would be saving customers more than 80 cents per month and would continue to do so over the life of the facilities."

Questionable statement: "30 other states have passed measures like Proposal 3." (Afford)

As noted in a previous MTS post on a previous pro-Prop 3 ad, the citation is for a Crain's Detroit Business story (paywall protected) that stated this:

"More than 30 states — including Illinois, Ohio and Iowa — already have adopted renewable energy standards similar to Michigan's proposal and are higher than Michigan's current standard of 10 percent."

Crain’s, after learning from MTS that the statement was being used in an ad, added a clarification to its July 6 report.

A Citizens Research Council of Michigan analysis on Proposal 3 says there are renewable portfolio standards in place in 29 states (including Michigan), while an additional eight states have renewable goals. (See map 1 of the report.) Thirteen states, the report says, have neither.

CRC says Michigan would be unique in a constitutional provision for a renewable standard. So, as MTS noted in September, "A viewer's impression would turn on the interpretation of the word 'similar.' Is a constitutional requirement for renewable power 'similar' to a statutory requirement for one?"

Questionable statement: "Big oil company lies -- we can’t afford them." (Afford)

Where did oil companies come from? Michigan uses very little oil to produce electricity.

A list of backers of the "no" on 3 campaign includes the Associated Petroleum Industries of Michigan.

API is a trade group, whose website reports: "Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry."

But the principal financiers of the primary anti-Prop 3 group CARE, are the state's two major investor-owned utilities: DTE and Consumers Energy. At the end of July, CARE had rasied $5.9 million; DTE and Consumers had combined to provide $5.8 million of it. CARE and other ballot committees don't report their finances again for another week.

Questionable statement: "Proposal 3 is supported by nurses, doctors and scientists because it will reduce pollution and give Michigan cleaner air and water. It will protect our great lakes, reduce asthma and lung disease." (Choice)

The ad cites the American Academy for Pediatrics for the asthma and lung disease claim. A 2004 statement from that group does state " ... coal-fired power plants are important sources of nitrogen oxides (precursors of ozone), particulates, and sulfur dioxide and are the largest sources of mercury emission in the United States."

The same report, however, also says, "Although numerous studies have shown that outdoor air pollution exacerbates asthma, the effect of outdoor air pollution on the development of asthma has been less clear."

In 2010, the American Lung Association said limits on coal-fired power plants would save 14,000 to 36,000 lives each year and prevent 240,000 asthma attacks.

Michigan generates most of its electricity via the burning of coal.

Questionable statement: "The Michigan Public Service Commission found renewable energy is now cheaper than new coal." (Afford)

The PSC report does say that wind energy is cheaper than a benchmark figure for the cost of power via a new coal-fired plant.

Questionable statement: "In Illinois, clean energy is reducing electricity prices." (Afford)

The report from the Illinois Power Agency says, "Renewable resources, in particular wind, have played a dramatic role in reducing electric energy prices in Illinois ..."

Overall impression: The ads attempt to sell Proposal 3's value in both dollar and quality of life terms. The cost argument relies heavily on the MEC analysis.

Foul or no foul: Foul. A vote for Prop 3 does not end the use of coal or other "dirty" carbon-based fuels to generate electricity. Utility bills are likely to go up, with or without Prop 3. And the reference to "Big Oil" appears to be nothing more than an attempt to link opposition to Proposal 3 to corporations that might be poorly perceived in the eyes of some voters.

The Center for Michigan (the parent company of Bridge Magazine and the Michigan Truth Squad) has been financially supported by a wide range of corporate and foundation supporters. We are grateful to all funders for helping us create and grow a new nonprofit journalism service for Michigan citizens. Those funders have absolutely no role in the editorial decisions of the Michigan Truth Squad or Bridge Magazine.

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