The Michigan Legislature passed bills four years ago requiring utilities to produce at least 10% of their electrical power from renewable sources, such as the wind and the sun, by 2015.
Now, some people want to see that percentage upped.
Michigan Energy Michigan Jobs is behind a ballot proposal to amend the state Constitution to require utilities to produce 25% from renewables by 2025.
To get the 25-by-25 proposal in front of voters in November, the bipartisan group backed by environmentalists must collect about 326,000 signatures by July 9.
They’re pushing the ballot proposal as not just environmentally necessary but also important for economic development, sparking $10 billion of activity through jobs and other investments in infrastructure.
But opponents – including utilities, business people and union officials – say it’ll end up costing them and their customers that same $10 billion in higher business costs and rates.
This camp says legislation, not the state Constitution, is the proper route for changing the standard, the same method used for the current 10% standard.
Barry Rabe, a professor at the University of Michigan’s Gerald R. Ford School of Public Policy and an energy policy expert, said it’s tough to predict what the cost would be and whether utilities would eat the extra cost or pass it on to ratepayers.
“We’ve seen nationally somewhat of a mixed record,” he said. “We live in a very volatile time of utility pricing.”
According to the U.S. Department of Energy, as of 2010, 3.6% of Michigan’s electricity was produced from renewables. The state’s three biggest sources of electrical power were coal, 58.8%; nuclear, 26.6% and natural gas, 11%.
Nationally, 13% of electricity was produced from renewables, coal, 42%; natural gas, 25%; nuclear, 19% and petroleum, 1%.
Within renewables, hydropower accounts for 63%, wind, 23%; biomass wood, 7%; biomass waste, 4%; geothermal, 3% and solar, less than 1%.
Supporters of the ballot proposal say it would only amount to an extra $1.25 per month for consumers. They say utilities, which are guaranteed profits, can easily absorb the costs.
“It’s going to cost money over time, but they’re having no trouble meeting the current requirements of the renewable energy standard,” said Michigan Energy spokesman Mark Pischea. “Let’s take that money they’re sending to West Virginia, Pennsylvania, Wyoming and Montana (for coal) and instead invest it in local jobs in Alma, St. Joseph, Sterling Heights, Traverse City.”
Pischea said there was little appetite among legislators to take on the initiative and so they chose the amendment approach.
The Clean Affordable Renewable Energy (CARE) for Michigan Coalition is leading the campaign to scuttle the ballot proposal.
“The math just doesn’t work,” said Steve Transeth, the CARE campaign’s senior energy policy adviser. “The coalition supports the development of green energy, wants a clean environment and wants to protect Michigan’s natural resources. Our opposition to this is because we believe this is the wrong answer for Michigan to reach those goals … The people who propose this (are) buying into unfounded promises of economic growth and cheaper energy.”
He said the state should wait until the 2015 deadline for meeting the 10% standard and then assess Michigan’s renewable-energy needs.
Thirty states, including Michigan, have mandatory renewable portfolio standards and another seven have voluntary renewable portfolio goals, according to the U.S. Department of Energy.
The Michigan Public Service Commission, which monitors the progress toward meeting the 10% standard, said in a February report that Michigan’s electric providers are on track to meet the requirement.
Rabe, the U-M professor, said Michigan has a long history of being first with environmental measures, such as the 10-cent bottle and can deposit law. But Michigan over the past decade or so has lost that strong commitment, he said.
“In the late 1960s and 1970s, Michigan developed a national reputation,” he said. “I would generally say in the last two decades, Michigan has been less likely to be among the first five or 10 states adopting new environmental policies.”