Complex bills get mixed reviews, with Michigan still behind the pack

The passage of a wide-reaching package of energy bills by the House last month was celebrated as a step toward a more modern energy plan for the state, but the renewable energy standards proposed lag behind those in other states and some worry the package gives too much to the big power companies.

The Senate is expected to take action this season on the package which includes an energy efficiency bill that requires power companies to reduce electricity use by 1 percent, renewable portfolio standards that require power companies to get 10 percent of the power they supply from renewable sources by 2015, and a repeal of the consumer choice law that allows anyone to switch electricity providers.

The energy efficiency bill (HB5525) is the clearest advance from an environmental standpoint, said Mike Shriberg, policy director at the Ecology Center, because it will require utilities to reduce electric demand each year. He called this bill “low hanging fruit” and “a win all around” because efficiency costs far less than developing new power sources.

This program is actually not new, Shriberg said; it was law in Michigan until it was wiped out in the rush to energy deregulation during the Engler administration, and compared with the other dozen states that have energy efficiency standards, Michigan’s target of 1 percent is on the low side.

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Renewable Portfolio Standards (HB5548 and HB5549), touted by Gov. Jennifer Granholm as a first step in http://www.michiganmessenger.com/showDiary.do?diaryId=790″>creating jobs in alternative energy, is seen as a positive step by environmental and business groups. The bill would triple the portion of energy the state gets from renewable sources to 10 percent by 2015. Environmental groups such as the Sierra Club are celebrating the creation of a standard, though some note that the standard is set to go into effect slowly — the bill only requires 4 percent renewable energy by 2012 — and that among the 24 states that have renewable energy standards, Michigan’s is not especially ambitious.

In 2006 Wisconsin adopted renewable portfolio standards that require 10 percent of the state’s energy to come from renewable sources by 2015. In Illinois, a 2007 law requires 25 percent of the state’s electricity to come from renewable sources by 2025, and 75 percent of the renewable energy must come from wind. California, the national leader on renewable energy, aims for 20 percent renewable energy by 2010 and 33 percent by 2020.

Consumer choice

The consumer choice bill (HB 5524) would require 90 percent of consumers to stay with the dominant electricity provider in their region. The measure has been strongly lobbied for by Consumers Energy and Detroit Edison, which together supply most Michigan homes with power. The power companies have contended that they need to have a stable customer base in order to invest in a new baseload power plant. Consumers Energy is in the beginning stages of developing a new 800-megawatt coal plant at its Karn/Weadock Generating Complex near Bay City.t

Environmentalists say it’s not great that this provision allows utilities to raise prices for residential users, and could potentially allow them to pass on the costs of building a coal power plant even before they start building it. However, the Integrated Resource Planning Provision of the bill would require utilities to go before the Public Service Commission and prove that their approach for generating power is the most “reasonable and prudent” option.

This will be difficult to prove for coal plants, Shriberg said, because coal is dirty, and http://www.michiganmessenger.com/showDiary.do?diaryId=744″>becoming expensive.

He said that the consumer choice rule change reduces the feasibility of most coal plants proposed for Michigan — merchant plants such as the one planned for Rogers City will not be assured of a customer base and will be less attractive a business venture.

Shriberg said he does not believe any more coal plants will be built in Michigan.

Jeff Holyfield, spokesman for Consumers Energy, sees it differently. The state’s “ 21st Century Energy Plan,” which was developed by industry and government officials, specified that a new coal baseload plant was part of a balanced approach to meeting Michigan’s energy future, he said.

Consumers Energy is unlikely to be surprised by developments such as carbon taxes or volatility in the coal price, Holyfield said. Its parent company, CMS Energy, was involved in drafting the Carbon Principles, the due diligence guidelines banks use to ensure that the new coal plants they finance are economically viable.

Consumers Energy said it is encouraging the Senate to pass the bills.

Shriberg said that the Ecology Center hopes to close loopholes and strengthen the bills before passage by the Senate.