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Posts from the ‘energy efficiency’ Category

Dec 19

Michigan’s energy overhaul: What’s in it and how we got here

After more than two years of negotiations, countless hours of committee hearings, numerous variations on several bills, untold column inches of news coverage and a dizzying series of false starts, dead ends and shifts of the political winds, the epic effort to overhaul Michigan’s energy policy finally drew to a close Thursday evening.

Folks, we have a deal.

Here are highlights of the final package, which Gov. Snyder has said he will sign into law.

  • Requires utilities to ramp up their use of renewable energy from their current level of 10 percent to 12.5 percent by 2019, and 15 percent by 2021.  Once a utility achieves or exceeds 15 percent renewable energy, they cannot reduce that level of commitment unless they demonstrate it is in the best interest of ratepayers.
  • Creates a new program for customers who want more—or all—of their electricity to come from renewable sources. The Public Service Commission is tasked with establishing a new rate under this program.
  • Sets a goal of meeting 35 percent of Michigan’s energy needs through renewable power and energy efficiency by 2025.
  • Maintains the requirement that utilities reduce energy waste by at least 1 percent each year, lifts a cap on how much they can invest in waste reduction programs and increases financial incentives available to utilities for going above and beyond the energy efficiency standard.
  • Maintains, for now, the “net metering” program that allows customers to reduce their energy bills by generating power at home. The bills also abandon, for now, an earlier proposal for an arbitrary “grid access fee” on net metering customers, and instead tasks the Michigan Public Service Commission with designing a new rate structure for net metering customers in the future.  The new rate design will be crafted through a public process over the next year, and then be implemented in the spring of 2019 at the earliest.  A new rate design could combine net metering with time-of-use pricing—in which electricity is more expensive at times of higher demand—to better reflect the value of energy when it is generated and used.
  • Requires utilities to undertake “Integrated Resource Planning” to guide their investments so they meet long-term energy demand at the least cost. These plans would go through extensive review and compare both generation and demand management options to meet future demand.

As MEC President Chris Kolb said in a statement to the media, “These bills are a vast improvement over earlier proposals and will keep Michigan’s energy policy moving in the right direction…This deal will save millions of dollars a year for Michigan residents by continuing to eliminate energy waste and increasing investments in wind and solar power, which are the cheapest ways to produce electricity.”

And while we would have loved a deal that accelerated Michigan’s transition to clean energy, a review of the negotiations that led us here makes it clear that things could have been much, much worse. This is an important victory.

What follows is a summary of the major milestones on the road to the energy deal. As you’ll see, MEC has been at the table from the very beginning—thanks to our generous supporters—and our policy pros have worked relentlessly to win the best possible deal for Michigan’s energy future.

How we got here

May, 2014 – Sen. Mike Nofs announces Energy Efficiency and Renewable Energy Workgroup.

MEC Policy Director James Clift is named to this panel charged with reviewing Michigan’s 2008 clean energy laws and recommending updates. Those laws required Michigan utilities to get 10 percent of their electricity from renewable sources by the end of 2015 and achieve annual energy savings through efficiency measures. The workgroup meets throughout the summer of 2014.

July, 2014 – “Energy Freedom” bill package drops. Read more

Jun 7

Power lines_Theodore Scott via Flickr

Senate energy plan: Summer school needed to fix failing grades

The Michigan Senate is likely to vote this week on a pair of bills to reform our state’s energy policy. Throughout the debates leading up to this point, MEC has maintained that any credible strategy for Michigan’s energy future must accomplish five goals: control costs for utility customers; minimize the risks of future price spikes; protect natural resources and public health; promote economic development; and improve reliability.

Since it’s graduation season, we decided to use those goals as the basis for a report card on Senate Bills 437 and 438. (You can read this recent post for a more detailed analysis.)

Unfortunately, although they were recently revised, these bills still get failing grades. Without major changes, the Senate energy plan isn’t ready to graduate.

Report card for SB 437 and 438

Control costs. Michigan utility customers pay some of the highest rates in the Midwest. The current legislation would increase those costs by $4 billion over the next 10 years. The bills abandon the use of competition and the free market to control energy costs. They also repeal the renewable energy and energy efficiency programs that have been highly effective in reducing energy waste and controlling costs. This legislation would allow the utilities to hold on to the $120 million in renewable energy surcharges they don’t need, since renewables are now the cheapest energy sources.

Grade: F

Minimize risks.  Renewable energy is the cheapest electricity available from new facilities and offers fixed prices over a 20-year period because it is not dependent on fuel costs. However, these bills would scrap our wildly successful renewable energy standard. Utilities are guaranteed a profit of more than 10 percent on every dollar they spend to meet customer needs, but Michigan families and businesses will take on all the risks when those dollars are spent on utilities’ first choice—large, expensive new natural gas-fired power plants. Unfortunately, it seems many current legislators don’t remember when the per-unit price of natural gas skyrocketed from $2 to $15 between 2002 and 2005. By failing to lock in low and predictable long-term prices, these bills will put Michiganders at risk of sharp price spikes.

The bills would continue energy efficiency programs through 2021, which would reduce our overall need for energy and therefore reduce risks for ratepayers. Between 2009 and 2014, energy efficiency programs helped Michigan customers avoid the use of more than 6 million megawatt hours of electricity. The programs save Michiganders $4 for every dollar invested, a total savings of more than $100 million every year.

Grade: D

Protect natural resources and public health. Coal-fired power plants are the #1 source of air pollution in the country and are major contributors to climate change. Michigan’s renewable energy standard has helped to reduce our dependence on dirty coal, which provided two-thirds of our power when the standard was adopted and now provides only half. These bills will stall that progress by immediately repealing our renewable energy standard and phasing out our waste reduction programs over the next five years. Meanwhile, Michigan residents pay hundreds of millions of dollars a year to deal with the health impacts of dirty coal plants. Our asthma rate is 25 percent above the national average, and more than 100 Michiganders die prematurely from ailments tied to coal plant pollution.

The bills set a new goal for waste reduction and renewable energy, but the language is non-binding.

Grade: D-

Promote economic development. Michigan’s clean energy law triggered $2.9 billion in economic development in Michigan from 2008 to 2015. For the first time, our economy began to diversify beyond the automotive sector. We became a top state for clean energy patents. Energy efficiency service companies have sprouted up across the state. That growth is largely attributable to provisions in the 2008 law that half of renewable energy projects be built by private developers, rather than the utilities themselves, to promote competition and innovation. All of those benefits will go away under the current legislation. The bills would not only free the utilities from competing with other companies, but would also allow them to make money off energy they played no part in generating.

Grade: F

Improve reliability. The bills add new sections that attempt to ensure all energy providers have sufficient resources to serve their customers. It also recognizes that our regional grid operator is taking steps to improve overall reliability.

Unfortunately, the Senate package takes a step backward by hampering efforts to use time-of-day rates to take advantage of the advanced meters we have already paid for to reduce peak demand.

Grade: C-

With grades like these, it’s no surprise the Senate energy proposal faces stiff opposition from a broad range of players across the political spectrum. The Legislature breaks after this week for summer recess, but without major changes to these bills, it looks like summer school is in order.

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Top photo courtesy Theodore Scott via Flickr.

Other images adapted from photo by Jack Amick via Flickr.

May 20

Wind farm_Tina via Flickr

Three key questions in Michigan’s energy debate

The Senate Energy and Technology Committee continues to deliberate on a package of bills that lay out a misguided approach to Michigan’s energy future—one that would suspend Michigan’s transition to cleaner energy sources, lead to major rate increases for Michigan families and throw a wrench in economic development in our state.

During three weeks of hearings on the bills last summer, strong opposition from MEC and many other groups made it clear that Senate Bills 437 and 438, as introduced, did not have the support to move forward.  Bill sponsors Sens. Mike Nofs and John Proos went back to the drawing board, and introduced substitute versions of the bills in late April.

Nofs, who chairs the committee, recently announced he had the votes lined up, but he now appears to again be working on new drafts. Such a broad range of groups have voiced opposition—environmental groups, energy efficiency contractors, major corporations (including Steelcase, Whirlpool, Johnson Controls and others) and even the conservative group Americans for Prosperity—that it’s hard to imagine the bills moving out of  committee without significant  revisions. Similar bills cleared a House committee last fall but have languished on the House floor.

Throughout this process, the issue of “electric choice” has been a major point of debate. (The term refers to the 10 percent of the state’s electric load allowed to come from alternative electric suppliers, rather than from utilities.) That small slice of the energy pie has dominated much of the discussion and disagreement between major industrial facilities and the utilities.

While energy choice is an important issue, the debate should not lose sight of the other 90 percent of our energy. The focus there should be on answering three basic questions:  How do we generate electricity? Who gets to generate it? And how much should we generate?

How do we generate it?

The case for making renewable energy Michigan’s go-to source of electricity is growing stronger all the time. For example:

  • The latest Michigan Public Service Commission update on the state’s renewable energy programs found that wind energy now costs less than half as much as it did in 2009.  More importantly, it costs less than any other new generation built today.
  • The MPSC also reported that more than $2.9 billion has been invested in renewable energy projects in Michigan since 2008, helping to diversify Michigan’s economy.
  • Michigan’s clean energy sector supports 87,000 jobs, according to a recent report.

Even setting aside jobs and investment—and the huge cost savings from the avoided health impacts of air pollution—it’s clear that renewable energy sources offer the best bang for the buck.  And yet, the current legislation proposes eliminating the state’s renewable energy standard.

Michigan’s electric utilities and supportive legislators have often claimed we don’t need a renewable energy standard, like the current one which required them to generate 10 percent of their electricity from renewable sources. The companies say they’ll invest in more renewable sources as costs come down. So, with wind and solar at record-low prices, the utilities must be buying up clean power like crazy, right?

Wrong. DTE Energy has told shareholders it will develop 100 megawatts of wind power in 2019, but that will result in a minuscule .2 percent increase in renewable energy per year. Similarly, Consumers Energy’s plans for three new, 100-megawatt wind farms over the next decade will only increase its renewable portfolio by .25 percent annually (in contrast to the nearly 1.5 percent per year they built to reach the 10 percent renewable standard).

That’s why MEC and a growing portion of the business sector are advocating for including language in the legislation to set a clear expectation that utilities will continue to transition to clean energy sources.  We have proposed language clarifying that, if renewable energy prices exceed the cost of building and operating new natural gas combined-cycle power plants, the utility’s obligation to invest in renewables would cease. MEC is encouraging legislators to approve the next phase of clean energy by increasing our current 10 percent standard by 1.5 percent each year from 2017 through 2022. Read more

Apr 15

DTE Belle River power plant

On retirement day for some old coal plants, bad state policies keep others limping along

You may have noticed a lot of news stories lately about coal-fired power plants. That’s because—with federal regulations kicking in to protect public health—today marks the end of the operating permits for a number of coal plants in Michigan, including Consumers Energy’s oldest generating units, sometimes charitably described as the “Classic Seven.”

It’s good news that these coal plants are retiring—good for our health, good for our climate and good for our pocketbooks. In 2008, when Michigan enacted clean energy laws, 66 percent of our electricity came from coal. Thanks to those laws, coal now supplies less than half our electricity. With a continued, steady increase in affordable renewable power and energy efficiency, we can shrink coal’s slice of the energy pie to 35 percent by 2020.

Unfortunately, even as they retire their oldest power plants, our large, investor-owned electric utilities are still clinging to dirty coal. DTE Energy, for example, still generates over 70 percent of its electricity from coal and continues to spend millions of dollars a year to keep old plants operating, heaping the costs onto Michigan families.

And sadly, our Legislature is doing nothing to protect Michigan residents from skyrocketing energy bills or the public health impacts of dirty coal plants. Read more

May 7

House Energy Policy Committee testimony - James Sarah May 7 2015
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MEC’s House Energy testimony: 5 takeaways

Spring temperatures aren’t all that’s heating up in Lansing. With Michigan’s 2008 clean energy laws set to plateau at the end of the year, policymakers are debating a handful of competing proposals for what our state’s energy future should look like. (We say “plateau” and not “expire” because, if lawmakers took no action, utilities would have an ongoing requirement to meet the existing standards.)

Gov. Snyder’s plan calls for as much as 19 percent renewable energy by 2025, along with a significant increase in energy efficiency and a shift away from coal and toward more natural gas. The Democrats have proposed generating 20 percent of Michigan’s electricity from renewable sources by 2022 and doubling the state’s annual energy savings from 1 to 2 percent.

Today the House Energy Policy Committee held a hearing on another package introduced by Rep. Aric Nesbitt, the committee’s Republican chair. The bills propose a number of actions that would turn back the clock on the economic development, cost savings and carbon reductions Michigan has achieved since 2008. For instance, they would repeal the energy efficiency standard and reclassify hazardous waste materials like scrap tires and railroad ties as “renewable” fuels.

MEC Policy Director James Clift and Energy Program Director Sarah Mullkoff testified at length during today’s hearing, making the case that Michigan needs a comprehensive energy plan that controls costs, maintains electric reliability, minimizes risks to ratepayers like you and me, promotes economic development in Michigan and protects natural resources. (You can view their presentation here.)

Here are five highlights from their testimony:

Households bear the brunt of energy costs. Electricity rates in Michigan have been increasing for years across sectors, but recently those costs have been shifted from large industrial users onto the backs of residential ratepayers. In fact, our residential rates are the highest in the region and among the highest in the country. If the Michigan Public Service Commission grants utilities permission to collect the rate increases they’re now seeking, our residential rates would increase an additional 15 percent over the next three years.  On top of that, Michigan taxpayers are subsidizing a fleet of old, inefficient coal plants whose performance is well below the industry average. Read more

Mar 13

Vivant staff with B Corp sign

Q&A: With climate declaration, Brewery Vivant continues striving to “Beer the Change”

As if making delicious beer wasn’t enough to win us over, America’s craft brewers have also been strong leaders in showing that businesses can thrive while giving back to their communities and finding innovative ways to protect the environment.

Case in point: Two dozen craft brewers announced this week they had signed a Brewer’s Climate Declaration, which says the companies will take action to reduce their greenhouse gas emissions and will engage with policymakers to support political action to halt climate change. Those breweries already are taking steps to reduce energy use, cut transportation emissions and conserve water, among other sustainability measures.

“It’s good for business, it’s not just good for the environment,” Craft Brew Alliance sustainability manager Julia Person told the Huffington Post. “We’re lowering our operating costs. It’s doing the right thing and having a benefit.”

So far, two Michigan companies—Rockford Brewing Company and Brewery Vivant—have signed the declaration.

In reading up about the climate declaration, we were impressed to learn that Brewery Vivant in 2012 became the first brewery in the country to attain LEED certification from the U.S. Green Building Council. We checked in with co-owner and sustainability manager Kris Spaulding to learn more about how the Grand Rapids brewery is striving to support its community and shrink its environmental impact.

Kris Spaulding

Brewery Vivant's Kris Spaulding.

MEC: Why did Brewery Vivant decide to sign on to the climate declaration? More generally, why have you made sustainability such a priority?

Kris Spaulding: Sustainability is one of the values we founded our business on. We believe that a great business exists because of the support of the local community. Therefore a business should be an active member of the community and should strive to find meaningful ways to engage with it and give back to it. These are values we hold personally, but that we believe all businesses should be thinking along the lines of the triple bottom line.

As for the declaration itself, climate change is going to continue to impact our industry and our world so I think it is best to work towards solutions now rather than waiting for more catastrophic events to finally lead to change happening. I like that the declaration challenges businesses to innovate and work towards solutions rather wait and see what someone else will do. Read more

Jun 16

1200px-T._B._Simon_Power_Plant,_Michigan_State_University,_East_Lansing_MI
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A clean power plan for Michigan

Many of us working on energy and climate policy looked forward to June 2 like it was Christmas morning. That was the date set for the EPA to announce a new draft rule to cut carbon pollution from power plants, building on the Clean Power Plan President Obama drafted last summer.

Now that we’ve had a couple of weeks to dig into the rule, does it match the hype leading up to it? On one hand, yes: It is undoubtedly the most significant action the U.S. government has taken to address climate change, and it should yield economic benefits and job creation.

On the other hand, the reality of the rule’s impact—at least in Michigan—does not match the sky-is-falling rhetoric opponents to carbon regulation have used to describe it. The rule reaffirms the action Michigan took in 2008 by passing Public Act 295, and meshes well with the clean-energy discussion started by Governor Snyder in 2013.

Still, Michigan will not achieve the required carbon reductions with a business-as-usual approach. We will need to be more aggressive in our transition to renewable energy and in reducing energy waste. Fortunately, MEC is already taking part in discussions in Lansing to outline the next steps for Michigan’s clean energy programs. Read more

Jan 14

Sarah Mullkoff hired to lead MEC’s energy policy work

Sarah Mullkoff

Sarah Mullkoff

Sarah Mullkoff has been hired as energy program director for the Michigan Environmental Council, the organization’s president, Chris Kolb, announced last week.

Mullkoff has worked in natural resource policy in a variety of capacities, most recently as energy & climate policy coordinator with the National Wildlife Federation. There, she advanced clean energy policies and carbon reduction campaigns for NWF’s six-state Midwest region.

She previously worked for Clean Water Action as Michigan campaigns coordinator; serves on boards of directors for the Great Lakes Renewable Energy Association and the Michigan Student Sustainability Coalition; and volunteers for social and environmental justice causes. She also serves on the steering committee for RE-AMP, a 160-strong coalition of Midwest nonprofits and foundations working on energy policy and climate change.

Mullkoff is a graduate of Michigan State University’s James Madison School of Public Policy with a major in International Relations and specialization in Science, Technology, Environment and Public Policy. Read more

Feb 14

Governor’s energy hearings start on Valentine’s Day, end on Earth Day! Be heard!

Since we love energy efficiency and clean renewable power here at MEC, it is quite appropriate that today – Valentine’s Day – is the first of seven public forums on Michigan’s energy policy called for by Governor Rick Snyder.

The findings will be assembled and delivered to policy makers by the end of this year as the basis for legislative action in 2014.

The last forum – in Traverse City – convenes, fittingly, on April 22. That’s Earth Day, the day we celebrate the planet and recommit ourselves to protecting it. What better symbolism?

A little background.

Read more

Jun 8

National Geographic 1981 cover "Energy"

Déjà vu

We’re a nation of champion procrastinators. That’s my conclusion after reading National Geographic’s special report, Energy: Facing up to the problem, getting down to solutions.

The piece is straightforward with hardly any breaking news. For instance, who (at least among those based in reality) doesn’t already know that the U.S. economy has been heavily dependent on cheap energy? Or that our insatiable thirst for petroleum sends countless dollars overseas and leaves us vulnerably dependant on unstable parts of world? Or that burning coal releases huge amounts of carbon dioxide, destabilizing our protective climate?

But why the unkind charge of procrastination?

Because the National Geographic special report was published way back in February 1981! (Special thanks to Chris Kolb who found it while helping his mom recycle her old magazines.) Read more

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