Truth Squad blows whistle on both sides' ads

Proposal 3, one of six measures on the statewide ballot on Nov. 6, seeks to install in the Michigan Constitution a requirement for the use of electricity generated from renewable energy sources, such as wind and solar.

Michigan currently has a state law that mandates a 10 percent "renewable portfolio standard" by 2015. Under Proposal 3, the RPS would become a constitutional measure and rise to 25 percent by 2025.

Leading proponents of Proposal 3 are environmental groups and businesses in the alternative/renewable energy field. They have coalesced in the Michigan Energy Michigan Jobs campaign. Leading opponents of the proposal are DTE and Consumers Energy, which have backed the Clean Affordable Renewable Energy for Michigan Coalition, or CARE, and statewide business groups such as the Chamber of Commerce and Michigan Manufacturers Association, which have helped fund a broad-based vote "no" ballot group called Citizens Protecting Michigan's Constitution.

This week, the Michigan Truth Squad, Bridge's sister publication, reviewed ads from both MEMJ and CARE about Proposal 3. You can see the analyses side by side below:

Pro-Prop 3 ad gets tricky with jobs claim

MICHIGAN TRUTH SQUAD ANALYSIS: "Made" and "Cash"

Who: Michigan Energy Michigan Jobs – Pro-Proposal 3 group

What: TV ads

Truth Squad call: Technical foul

Michigan Energy Michigan Jobs (MEMJ) is a ballot proposal committee supporting Proposal 3, a measure to require utilities to obtain 25 percent of Michigan’s electric needs from renewable sources by 2025 (with some caveats). MEMJ is a coalition of environmental, alternative energy, union and business interests.

In the latest reporting period ending July 20, the group raised $2,247,277, according to state campaign finance records. Of that amount, $1,772,000 came from clean-energy advocacy organizations in San Francisco and New York. Its largest in-state contribution was $450,000 from the Michigan League of Conservation Voters.

Questionable statement: "Michigan spends billions importing coal from other states and oil from the Middle East. (TEXT ON SCREEN: ‘1.7 Billion to other states. Source: U.S. Energy Information Administration Website.’"

This state report says Michigan spent $1.39 billion to buy coal to produce electricity. And all of the coal was imported.

Michigan imports 97 percent of its petroleum needs.

The state is expected to use 4.12 million gallons of gasoline in 2012.

Largest single source of U.S. petroleum imports is Canada; Persian Gulf nations constitute the second-largest source.

In 2011, the United States spent $327 billion on net oil imports, says the Congressional Research Service.

Questionable statement: "That's right, 60 percent of Michigan's electricity comes from imported coal. (TEXT ON SCREEN: 60% OF ELECTRICITY FROM IMPORTED COAL)."

This Energy Information Administration analysis says three-fifths of the state’s electric generation stems from coal. As noted above, a state report says all Michigan’s coal is imported.

Questionable statement: "It will create 94,000 jobs Michigan jobs and spark new businesses (TEXT ON SCREEN: create 94,000 jobs Michigan jobs. Source: Jobs and investment impact study done by MSU, 8/10/12; www.mienergymijobs.com/economicimpact)."

The study can be found here, on the site of the Michigan Environmental Council. The MEC is a supporter of Prop 3 and a member of MEMJ. The study notes that its work was "supported by a contract" between MSU and MEC. And an MEC spokesman confirmed that the group paid for the study.

The MEMJ page says 74,000 jobs would come from work toward the renewable standard. Another 20,000 would come from a 50 percent market capture of the manufacturing, for a total of 94,000.

However, that’s not exactly what the study says. The summary notes:

"The $10.3 billion investment in renewable energy in Michigan that would be required by the proposed 25% by 2025 policy could create 74,495 job years (emphasis added) in Michigan, which is divided into 31,513 construction jobs years and 42,982 operations and maintenance job years. … Additionally, there is potential to capture manufacturing job creation; however, the magnitude of that gain is dependent on the success of Michigan manufacturers’ ability to capture market share in the renewable energy market."

A "job year" is a technical term, defined in this report as "Full employment for one person for 2,080 hours in a 12-month span."

As the Mackinac Center for Public Policy, a Midland-based free market think tank, cheekily noted: "That is, a person newly hired by a wind company and who works 25 years would count as 25 job years, though it is still just one job."

MEMJ counters that "job years is an academic term that is always translated as jobs." The group pointed to a Detroit News story from Sept. 5 about jobs created by natural gas drilling, which MEMJ says is based on a report that uses the same terminology.

But not every economist you speak to will agree with the terms' flexibility.

Questionable statement: "There are 8,000 parts in a wind turbine and all of them can be made in Michigan."

A study by the Center on Globalization, Governance and Competitiveness at Duke University says a wind turbine has an estimated 8,000 parts.

The state’s Michigan Economic Development Corp. says, "Michigan's industrial base, tuned to supporting the needs of the automotive industry, has all the expertise and capacity to handle the advanced precision manufacturing needs of the wind energy industry. In fact, federal studies rank Michigan among the top four states in industrial capacity to develop and manufacture wind energy systems."

Questionable statement: "In West Michigan they make the blades."

Holland-based Energetx makes wind turbine blades.

Questionable statement: "Astraeus wind manufacturing in mid-Michigan manufactures hubs."

Astraeus Wind in Eaton Rapids (southwest of Lansing) makes hubs.

Questionable statement: "Danotek in Southeast Michigan makes high-tech generators that create clean energy and jobs."

Canton-based Danotek makes "high performance permanent magnets." Those parts are key to modern wind turbines.

Overall impression: The ad is better on describing Michigan’s current electric generation situation than it is in describing the employment prospects if Proposal 3 is enacted. Michigan has seen considerable activity in the manufacture of, and siting of, wind turbines.

Foul or no foul: Technical foul, which MTS defines as "A statement that implies something that isn’t quite true and deserves additional explanation, or that is entirely false."  A typical viewer is likely to think of a "job" being a "job" – something that will last, not something that ends in a year. Equating the word "job" with the economist term of "job year" certainly "deserves additional explanation."

Anti-Prop 3 ad doesn't back up claim on big utility bills

MICHIGAN TRUTH SQUAD ANALYSIS: "Facts"

Who: Clean Affordable Renewable Energy for Michigan Coalition

What: TV ad

Truth Squad call: Technical foul

Questionable statement: "In a few short weeks, you’ll be asked to vote on an energy mandate that would be locked into our state constitution. Because it would be locked into our constitution in a way that cannot be changed quickly or easily, this plan would affect your utility bills and taxes for years to come."

Proposal 3 would require Michigan utilities to generate 25 percent of their electricity from renewable energy resources by 2025, with some caveats. Under current law, electric providers must generate 10 percent of their energy from renewables by 2015.

The proposal, which would amend the state constitution, is opposed by the Clean Affordable Renewable Energy for Michigan Coalition, which includes the state’s largest utilities, and a number of business and labor groups.

CARE raised $5,922,165 to defeat the proposal, according to its most recent state campaign finance filing. Of that, $5.8 million was contributed by DTE Energy and Consumers Energy. Each gave $2.9 million.

The ad does not explain how the 25 x 25 proposal would affect taxes "for years to come." It cites an Associated Press story in supporting the claim, but the story does not mention taxes.

Questionable statement: "Michigan would be forced to generate 25% of its electricity from renewable energy by the year 2025. Even though it’s expensive and less reliable."

CARE cites a Michigan Capitol Confidential story from July 11, 2011, as its source for the claim that renewable energy is "expensive and less reliable."

The story quoted Pat Michaels, a senior fellow in environmental studies at the Cato Institute,  as saying that mandated renewable power will make energy more expensive. Michaels also said that renewable energy is unreliable, requiring more back-up generation.

But the story did not cite any statistics to back up Michaels’ claims. It did say that Consumers Energy customers were paying a $2.50-a-month renewable energy surcharge, but that the surcharge was expected to drop to 65 cents in September 2011.

In May, the Michigan Public Service Commission approved lowering Consumers Energy’s monthly renewable surcharge to 52 cents, citing lower renewable energy costs for the utility.

Michigan Capitol Confidential and the Cato Institute are not exactly disinterested sources of information on renewable energy. Michigan Capitol Confidential is a publication of the Mackinac Center for Public Policy, which has been critical of renewable energy policies.

The Mackinac Center and the Cato Institute, a libertarian think tank, contend that renewable energy sources, such as wind and solar, are not economically viable because they rely on hefty government subsidies.

Questionable statement: "The wind often doesn’t blow. The sun doesn’t always shine. In fact, this experiment would have an estimated price tag of $12 billion."

CARE cites a Massachusetts Institute of Technology study, which says utilities are being challenged to provide a steady flow of reliable energy. That’s because it’s difficult to operate fossil fuel-powered generating plants in a flexible manner to smooth out the ebb and flow of power from wind and solar sources.

The ad cites a story in the News-Herald of Southgate for its claim that the 25 x 25 proposal has an estimated price tag of $12 billion.

CARE provided the Truth Squad with background material showing that the $12 billion cost estimate came from this Consumers Energy statement:

"Looking at the increased amount of renewable generation (17,500 GW-hours) we would need if we went to a 25 percent RPS — at an average cost of $2,500/KW (wind) at 40 percent capacity factor — it would be a $12 billion investment if the state used mostly wind — and that’s the cheapest renewable right now."

The group also paid for a study on Proposal 3’s impacts by Ken Sikkema, a senior policy fellow at Public Sector Consultants in Lansing. Sikkema is a former state lawmaker and a past executive director of the West Michigan Environmental Action Council. (Editor's note: Sikkema also serves as a paid policy adviser to the Center for Michigan, which produces the Michigan Truth Squad. Sikkema has no part in the Michigan Truth Squad and he has not been part of the internal research and writing team for this Truth Squad analysis or any other.)

Media reports on the Sikkema study said it found Proposal 3 would cost $10 billion to implement. The $10 billion was in a footnote in the study attributing the cost to a Michigan State University study.

The MSU study found that $10.3 billion in renewable energy investment would be required to meet the 25 percent renewables standard.

Sikkema told the Truth Squad there are too many unknowns, including the price of fossil fuels and regulatory costs, to accurately predict how much more renewable energy might cost than conventional power plants through 2025.

But he noted that Consumers Energy, DTE Energy and MSU all predicted a range of between $10 billion and $12 billion.

Questionable statement: "That works out to thousands of dollars in higher electric bills for Michigan families and small businesses."

Sikkema’s study said electricity customers in Michigan would pay more if voters passed Proposal 3. But the study said it is unclear how much rates would rise because of various uncertainties associated with the proposal.

For example, Proposal 3 caps annual rate increases at 1 percent a year, but the Sikkema study says it is unclear what current costs would be included in calculating a baseline rate from which the maximum 1 percent annual rate increase would be calculated.

Sikkema also noted that Michiganians pay taxes on utility bills in two ways: Directly, via a sales tax on the bill. Also, owners of the equipment to generate power -- in this context, wind turbines -- would pay a personal property tax (the state's business equipment tax). Those taxes, Sikkema says, are "baked in" to the rates, as set by the Public Service Commission, and are paid indirectly by consumers.

CARE and the utilities have said the 1 percent cap likely will be challenged in court should Proposal 3 pass.

Overall impression: No one is disputing that raising Michigan’s renewable energy standard to 25 percent will cause increased spending on electric generation. Proponents of Proposal 3 regard that cost as an investment that will create jobs and boost alternative energy businesses, giving a lift to Michigan’s economy. Opponents regard that increased spending as costs that will be passed on to energy consumers.

A central question is how much more Proposal 3 will cost to implement. The ad says $12 billion. The MSU study pegs additional spending at $10 billion between 2016 and 2030. And the Sikkema study, paid for by CARE, says the answer is unclear.

A February report by the Michigan Public Service Commission found that the cost of renewables is significantly less than the cost of building a new conventional power plant.

The ad raises a valid concern that a constitutional amendment will make it difficult to adjust the 25 percent renewables standard should it prove unworkable.

But the ad also relies on sources with a vested interest, or clear point of view on policy, plus media reports on statistics from those sources to back up its various claims.

Foul or no foul: Technical foul, which MTS defines as "A statement that implies something that isn’t quite true and deserves additional explanation, or that is entirely false." In this ad, the scariest claim for voters is the notion that consumers and families will pay "thousands of dollars in higher electric bills." The add does not clearly explain, or cite sources that clearly explain, that assertion.

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Comments

Tom
Thu, 09/20/2012 - 8:23am
I was in northern Michigan two weekends ago and went by a great looking wind farm - acres of windmills -- NOT A SINGLE BLADE was rotating. So...have our constitution bind us to more of the same? I hope not.
Thu, 09/20/2012 - 9:08am
Re Truth Squad point #2: "That’s right, 60 percent of Michigan’s electricity comes from imported coal. (TEXT ON SCREEN: 60% OF ELECTRICITY FROM IMPORTED COAL).” This Energy Information Administration analysis says three-fifths of the state’s electric generation stems from coal. As noted above, a state report says all Michigan’s coal is imported. I stopped reading after I stopped laughing. 60% is the same as 6/10 and is the same as 3/5. I learned that in 3rd Grade.
Big D
Thu, 09/20/2012 - 9:55am
READER BLOWS WHISTLE ON TRUTH SQUAD "TECHNICAL FOUL" According to the Michigan Truth Squad, "A February report by the Michigan Public Service Commission found that the cost of renewables is significantly less than the cost of building a new conventional power plant.". TECHNICAL FOUL. According to the MPSC article ("MPSC Report: Michigan Utilities Making Progress on Meeting State's Renewable Energy Standard ") cited, "o Compared to building a new, conventional coal facility, renewable energy contracts are significantly lower in price - with the exception of five small contracts negotiated early on. The two most recent contracts approved by the MPSC for new wind capacity have levelized costs of $61 to $64 per megawatt-hour (MWh). o The weighted average prices of renewable energy contracts is $91.19 MWh, which is less than what was forecasted in renewable energy plans, and is substantially lower than the cost of new coal-fired plants." This report fails to make some important points that would elucidate these statements and without which the MTS assertion isn’t quite true and deserves additional explanation. To wit: o The cost comparison being made is between the CONTRACTS to deliver electricity resulting from the construction of conventional or "renewable" plants, not "...the cost of renewables.". o The actual costs are obscure because the "renewable" projects have massive subsidies and tax credits (which taxpayers or taxpayers progeny pay for), and the conventional contracts are inflated by oppressive EPA regulations, and general lawfare. o There would be intense “legal” pressure to overcome the 1% PA rate increase limitation. o The "weighted average prices of renewable energy contracts" is not explained, leaving the potential for related costs to have been omitted: The actual production of wind (usually acknowledged to be intermittent, but overstated), the cost of backup generation facilities, and the cost of massive improvements to the grid. In the spirit of spinning, I offer: Were Prop 3 to be approved, o There would be intense pressure on governments to preserve/increase expensive wind subsidies. o There would be intense pressure to wrest zoning control for wind from local governments (who aren't 100% behind development). o The thousands of new 500' turbines would make the Michigan landscape unrecognizable, and the negative health effects of living in close proximity to turbines would affect tens of thousands more Michiganders. o The high proportion of "renewable" generation and all its tails would be unlikely to result in any actual net "reduction in CO2". Side Note: Maybe all these larcenous special interests will learn that trying to enshrine their privileges in our constitution doesn't pass muster with an informed electorate.
Big D
Thu, 09/20/2012 - 9:59am
Correction: The "1% PA rate" bullet belongs in the third list, not the second.
Bashar Dimitry
Thu, 09/20/2012 - 12:28pm
Wow, the "health risks of wind would be detrimental to thousands of Michiganders"? Coal has actual health risks. It's associated with mesothelioma, lung cancer, and other forms of lung disease and other forms of disease period. Wind has none, zero. That is a fact. So why are you telling a blatant lie? I must give you credit sir; you have an incredible amount of nerve to tell such a lie. As far as the aesthetics: you won't see most of the turbines because they'll be in mostly rural areas, but hopefully some will end up along free way routes. It's mostly a matter of opinion, but generally speaking, you're simply wrong. They are very aesthetically pleasing and beautiful to look at, especially when you consider they won't harm Michigan's beautiful landscape or wildlife. Sorry to discredit you but when you tell that big of a lie, you must know someone will dispute it.
Big D
Thu, 09/20/2012 - 3:55pm
Bashar: I urge you to read the vast quantity of news and documentation of adverse health effects from proximity to operating wind turbines. try www.windaction.org When you're done, I'll accept an apology. I know there are people who prefer the industrial look of rank -on-rank of wind turbines to nature. I suspect there are more of us that DO NOT. ...and a lot of use live in rural areas. Oh, wait, that's what you propose to pollute the vistas. Hmmm. The impact of coal plants is exaggerated based on the emissions they used to produce (and still do in many other countries). As for calling me a "liar", I forgive you.
Maryanne Jorgensen
Mon, 09/24/2012 - 11:09am
I live in one of those "mostly rural areas" so I DO have to see proposed windmills. Speak for yourself apparently in the "city".
Bashar
Sun, 10/21/2012 - 11:36am
And if you're complaining about the noise and the nuisance it creates so close to your house, then that's fine. But to say that it has adverse health effects. I've talked to plenty of people who work day and night on and by these things out in the middle of no where near no residential properties. I've never heard a health complaint. Studies tying brain cancer to cell phone use are much more accurate. Getting them away from your house to avoid noise is a legitimate concern. I don't blame you for that. But noise never hurt anyone. The train in downtown Chicago is at least 3-4 times as noisy as any wind turbine I've ever heard, and that hasn't proven to hurt anyone over the past 90 years. I do hope they don't build these things near residential properties, but if they do, just think of the people in Chicago and realize you can man up and deal with it. You are "Big D" after all.
Bashar
Sun, 10/21/2012 - 11:23am
Wow. I know that there is no changing your mind. But do you know that you gave me a website mainly filled with opinion pieces. There is no concrete scientific evidence of adverse effects of wind. There is plenty of concrete scientific evidence of the adverse effects of coal mining. You get mesothelioma, lung cancer, liver problems, skin irritation, etc. http://preview.browncounty.dminteractive.com/i_brown/minutes/ca708d015fc...You can believe what you want. But you should be more specific in the links you direct people too. Give me the exact page of the pseudo science please.
Jim Lang
Thu, 09/20/2012 - 12:42pm
"Questionable statement: “That’s right, 60 percent of Michigan’s electricity comes from imported coal. (TEXT ON SCREEN: 60% OF ELECTRICITY FROM IMPORTED COAL).” This Energy Information Administration analysis says three-fifths of the state’s electric generation stems from coal. As noted above, a state report says all Michigan’s coal is imported." You lost me here, Bridge. Are you suggesting that 60% is different than three-fifths?
Derek Melot
Thu, 09/20/2012 - 12:45pm
Mr. Lang, Not at all. "Questionable statement" is merely MTS' label for a reviewed or analyzed statement. Thanks for your question.
Neil
Thu, 09/20/2012 - 1:13pm
There is not a level playing field with government subsidies. How long must we have these subsidies, a 1,000 years? Why are the wind farms paying business personal property taxes on the wind turbines? These taxes are passed on to the consumer in paying higher electricity prices. It is noted that there is also the cost of backup generation. That is if the wind does not blow the electricity from the wind turbines must be replaced. The wind turbine by itself does not provide base load supply which means guaranteeing that the customer always has electricity when the customer flips the switch. When the playing field is leveled, is the wind turbine cost effective?
Mag
Thu, 09/20/2012 - 2:39pm
The purpose of prop 3, is to get 25 percent of our energy from renewable resources like wind, solar, and biofuels by the year 2025. I think you're under the assumption that they are basing their entire energy project on the hopes that the wind will blow 24/7--which is pretty obvious that it doesn't.
William Bock
Thu, 09/20/2012 - 4:54pm
Frankly, I am not interested in all of the details, and won't take the time to read this Truth Squad article word for word. I am voting yes on this proposal because it is the right thing to do. There is no sensible argument in favor of continuing to use up finite, polluting energy sources such as coal and oil. Make all the jokes you will about wind and solar power (and if you buy into these "jokes", you are allowing yourself to be duped by big energy and big business), green, renewable energy sources are the future if we are to have a future. So, the "questionable statements", etc. in this article are irrelevant. Yes, the wind doesn't always blow, and of course the sun doesn't shine at night, but those are arguments meant to cloud the discussion, and throw dust in the eyes of the truth. Vote yes on Prop. 3
Bob Farning
Fri, 09/21/2012 - 11:42pm
This "Coalition" is 90% out of state and funded by green energy proponents who seek subsidies, federal loan guarantees and grants just like Solyndra. This is nothing but a scam.
Carol Ottinger
Sat, 09/22/2012 - 5:07pm
Farms in my area have wind turbines and love them. We can not stay in 1959 forever. Some area's have had the turbines for 25 years already. NO. The wind does not blow like crazy ever day of the week but there is usually enough wind movement to keep the blades turning. Some days more than others. Better than coal. Why is everyone so afraid of moving forward?
Bashar
Sun, 10/21/2012 - 11:38am
Thank you so much! If you ever find one piece of evidence linking wind turbines to adverse health effects, please let me know. Lots of people have opinions about how it's adversely affected there health, yet can't name one health condition or disease that it has caused. Go figure.
Rodger Kershner
Mon, 09/24/2012 - 10:45am
You have missed the whole point in the $10 billion vs. 12 billion debate over the cost of renewables. You have ignored completely any comparison to the cost of the alternative. New generating plants have to be built regardless of whether we have a renewables standard. If we don't spend billions on wind generation, we will have to spend billions on new coal-fired plants, nuclear power plants, or something else. The comparison to that alternative cost is the only meaningful figure.
MD Baldwin
Fri, 10/05/2012 - 11:04am
What is the useful life of a wind turbine? How many years before it has to be taken apart and rebuilt? What are the maintenance costs? Same questions for solar power. My understanding, not researched, is that solar power units last about 10 years before they become too inefficient to function properly. (If someone has better information, please post) Is the efficiency of a solar unit the same on a cloudy day as on a bright, clear day? Probably not. I have no objection to including renewable generation as a portion of the electrical supply grid, as long as it stands on its own, without penalty to rate payers or taxpayers. My understanding is that currently, and for at least the near term, that renewable generation won't meet that test. Embedding the requirement in the state constitution is foolhardy and thoughtless. We currently have a 10% mandate by law. Change the percentage if you can justify it economically, but don't put it in the constitution! By the way, on NPR this morning, the announcement was made that two ocean vessels will be docking in Muskegon this week, delivering wind turbine blades made overseas. Is there any hope that we can make the parts for the wind turbines at a competitive price, or will we be importing them? That question should be thoroughly researched and the results published before we lock this proposal into our constitution!