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Groundwork to State Senate Energy Committee: Kill SB 437 and SB 438Print

Clean Energy | May 6, 2016 | By Jim Dulzo

Groundwork to State Senate Energy Committee: Kill SB 437 and SB 438

This week the Groundwork Center for Resilient Communities sent the letter, below, to members of the Michigan Senate Energy and Technology Committee, chaired by Sen. Mike Nofs of Battle Creek (pictured above). We hope you will read it over and send your own note to your own state senator. That’s now very easy to do—click here, enter your address, and you’ll see your own senator’s email address, phone, and website. You can use our letter for guidance. 

Here's an in-depth article from Midwest Energy News that looks at the Michigan Senate package.

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May 5, 2016

Energy & Technology Committee
Michigan Senate
Lansing, Michigan

Dear Senators,

We are writing on behalf of our statewide membership regarding SB 437 and SB 438.

We’re distressed to see that the latest versions of these bills are not improvements over the originals. They remain regressive energy reform packages—out of step with what is happening in America and in the world, and detrimental to Michigan’s economic future. The bills should not be voted out of committee without big changes to their energy efficiency, renewable clean energy, net metering and Integrated Resource Planning sections.

These bills ignore what so much of the world already understands: Human civilization is moving rapidly away from fossil fuels and toward clean, less-expensive, renewable energy and energy efficiency. Utilities must lead this shift, and our laws must make sure they do. 

This is not just some academic’s theory. Virtually all industrialized countries—and most U.S. states, including many here in the Midwest—use standards or mandates, not mere goals, like those in these bills, to make sure their utilities deploy more wind, solar, and energy efficiency. They understand it is the only way to make sure citizens get what they clearly want: clean air and water, lower electricity prices, more jobs, more investment, and stronger tax bases. Michigan’s 2008 standards worked incredibly well even according to the state’s own annual studies. Utilities met their 10 percent renewables standard on time and under budget; wind power became cheaper than new coal power and now matches or beats new gas power. And the 2008 standard for 1-percent annual gain in efficiency saves three to four times what utilities are required to invest on behalf of ratepayers.

These mandatory standards triggered a brand-new Michigan manufacturing boom. Michigan manufacturers—among the world’s most advanced—started making wind turbine towers, blades, hubs, nacelles, and gears; high-efficiency lights, fans, pumps, burners, windows, and insulation; and solar cells, panels, electronics, and hardware. Michigan industry’s response means that, today, clean energy employs 87,000 Michiganders.

SB437 and SB438 will slow this positive growth. They sabotage clean energy standards by substituting renewable and efficiency “goals” that merely amount to polite suggestions to utilities. They quash future development of customer-owned solar projects— commercial, industrial, and residential—by setting a plainly unfair, low rate for the power they produce. They pervert the meanings of “clean” and “renewable” with inappropriate, new definitions that fool no one—including, and especially, major corporations looking to locate in states with strong renewable energy policies. Unlike supporters of this package, most such companies do not view burning trash as “clean” or “renewable.”

All companies want regulatory certainty—particularly clean energy technology manufacturers, who need to know they have strong home markets for their products before making major investments—the kind of markets standards produce. But other kinds of corporations have strong positions on clean energy policy, too: General Motors, Ikea, Microsoft, and many other Fortune 500 firms want to invest in states with strong clean energy policies. Switch Inc.’s assertion that it would locate here only if it could obtain 100-percent clean energy is just one example of an increasingly common phenomenon.

These bills purport to solve the “goals” vs. “standards” controversy by requiring Integrated Resource Planning. But, as written, IRP will maintain the uncertainty companies fear. It would decide generation and efficiency strategies solely on cost, with no regard to what’s best for the environment, local communities, or public health, and with plenty of opportunity for contested rate cases. Without firm standards, IRP is a recipe for little or no use of renewables or efficiency, and frequently shifting policy and regulatory rules as, over the years, different administrations interpret IRP in different ways.

If you have not seen the attached letter, signed by several dozen major American companies, please read it. It’s directed at you and your fellow Michigan lawmakers, and could not be clearer about where America’s corporate energy future is heading, and what Michigan must do to attract more corporate investment.

Frankly, we find the process that produced these bills troubling. The committee was supported last summer by a work group that studied many possibilities for energy reform before Senators Proos and Nofs authored SB 437 and SB 438. But their bills largely reflect our monopoly utilities’ wish lists, allowing them to continue with business as usual. SB 437 and SB 438 are easy on utilities but hard on our economy, environment, and ratepayers—who, all polls indicate, strongly favor more renewables and efficiency. The bills will raise rates, harm emerging industries, kill Michigan jobs, and hold back local tax bases.

We urge you to either kill these bills or drastically revise them to make sure Michigan keeps moving toward a bright, clean, efficient, renewable energy future. We need firm and ambitious renewable standard of at least 30 percent by 2013, a 2 percent annual efficiency standard, expanded and fair net metering laws that encourage more private solar development, and Integrated Resource Planning that puts truly clean energy and highly economic efficiency first. Anything short of that harms our state and your constituents.

Thank you very much for your consideration.

Sincerely,
Jim Dulzo      
Senior Energy Policy Specialist