On December 15, Michigan legislators approved a sweeping plan to revamp state energy policy, backing a late-breaking agreement brokered by Governor Rick Snyder (R) in the final hours of the lame-duck session, according to a report by The Detroit News.
The heavily lobbied plan, which won bipartisan support just before the Michigan Legislature adjourned for the year, creates new approval processes for utilities planning to replace aging coal-fired power plants; largely maintain the state’s limited “electric choice” program; and increases a mandate for renewable energy, local news outlet said.
In the end, it was the compromise wording around energy choice proposed by Governor Snyder – mandating that 10 percent of Michigan’s electric ratepayers still would be allowed to use alternative energy suppliers instead of their incumbent utilities — that satisfied choice advocates and allowed the passage of Senate Bill 437. The legislation passed by 79-28 in the Michigan House and was then confirmed in the Senate by 33-4.
The final version of the measure also requires alternative electric suppliers “to demonstrate that they have four years of firm capacity” to offer customers.
In Michigan, the choice program is primarily used by industrial and educational customers, who worked with Snyder over the past week to finalize the deal, the news outlet said – noting that the program is quite popular, with roughly 11,000 potential customers waiting to join.
In addition, a bill focusing on renewable energy, Senate Bill 438, passed, despite strong opposition up-front from net metering advocates. Initially, the bill would have required customer-operators to pay full retail rates for energy from they buy from the grid, but to sell spare power they generate back to their utilities at wholesale rates.
However, in the version of the bill that passed, about 2,000 current customer-operators statewide were grandfathered into the current program.
In addition, the newly minted measure requires the Michigan Public Service Commission to determine if a proposed “capacity charge” is necessary, how high it could rise or if it would be more appropriate for an alternative supplier to secure capacity demands through a three-year auction process.
What’s more, the second measure requires Michigan utilities to buy or produce at least 15 percent of their energy from renewable sources by 2022; building on the 10 percent by 2015 standard that they already have met. The bill expands the definition of renewables to include geothermal, steam, wood biomass, and more.
“I think it’s a win for our residential rate payers; it’s a win for our businesses and job creators here in the state; and it’s a win to make sure we have the energy capacity in the long term to keep the lights on,” Representative Aric Nesbitt (R-District 66) told The Detroit News.
Representative Gary Glenn (R-District 98), a leading choice advocate, voted against the package to honor a promise he made to a group he worked with on the issue, but, the newspaper said, he appeared to go out of his way to praise the final product before his colleagues voted.
“As I understand the bills …, there are significant improvements in energy policy that will benefit rate payers,” he told the newspaper, “and from my view it’s a good starting point from which hopefully we will expand energy choice in the future.”
“Today, Michigan took a vote that reaffirms to the advanced energy industry and their customers that Michigan is open for business,” said J.R. Tolbert, VP for State Policy with Advanced Energy Economy. “The passage of Senate Bills 437 and 438 will help Michigan build on the enormous success secured under the previous 10 percent Renewable Portfolio Standard (RPS) and money-saving energy optimization standard. By increasing Michigan’s RPS to 15 percent of annual retail electricity sales, the state has the potential to attract an additional $2.5 billion to 4.3 billion in renewable energy investment by 2021.”