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Phony Energy ‘Markets’ Need Mandates from Lansing

June 23, 2015 | |

Consumers Energy and DTE readily admit that they wouldn’t be using wind power unless forced to. 

* This editorial first appeared in the Grand Haven Press on June 18, 2015

The debate among state lawmakers over how best to update Michigan’s renewable energy policies reveals a stark difference.

Some in Lansing are loath to actually require our monopoly utilities to add more renewables or help customers cut energy waste. But others insist that only strong legislation that forces utilities to provide additional clean energy will get the job done.  

History favors the pragmatists. Back in 2008, lawmakers passed bipartisan legislation that required utilities to get to 10 percent renewables by 2015 and help customers reduce energy waste via “energy optimization” programs.

There were clear deadlines, plus “off ramps” in case things got bumpy. They didn’t.

Quite the opposite, in fact: Goals were met on time and under budget. The law spurred $2.9 billion in private investment in renewables; created thousands of new, good-paying Michigan jobs amidst a collapsing economy; and began saving more than three dollars for each one utilities invested in optimization programs. Today, once-pricey wind power is less expensive than all other forms of energy.

Many in Lansing insist there’s nothing to worry about because utilities will continue to add more clean energy to their mix without firm legislative requirements. Their remarkably evidence-free argument is that expanding the 2008 standards, which they now attack as “mandates,” is unnecessary: If wind is cheaper than new coal and about the same as new gas, and if optimization works so well, then, hey, market forces will do the job.

But the anti-mandaters are talking about market forces that barely exist, if at all, and have little to do with what utility customers actually want. Since our utilities are monopolies, they’re guaranteed profits, and they benefit from clinging to the status quo, because it’s what they are best at.

In fact DTE and Consumers are quite up-front about this: Both admit that their fabulously successful renewable and optimization projects exist only because Michigan law forced them to act.    

Meanwhile, the state’s largest monopolies continue to ignore their real market—their customers, not their stockholders and vendors.

A large majority of Michigan families and businesses clearly want more renewable energy and money-saving optimization programs. Every recent state and national poll—liberal, conservative and independent—backs that up. In fact, a recent poll completed by Public Opinion Strategies pointedly asked about using mandates to make utilities provide more clean energy. Even that won by beyond-landslide margins.

Meanwhile, major national corporations, impatient with the slow progress in certain parts of the country, including in Michigan, are acting on their own. Sixty percent of the largest American companies now have goals to increase their renewables use. To make them, they either buy renewable credits, hector their power companies into workarounds that get them the clean energy they and their customers want, or outright invest in wind or solar on their own.

They include General Motors, Ford, Kellogg, Johnson & Johnson, P&G, Staples, Walmart, Ikea, Hilton, 3M, Mars, and dozens more; the list grows steadily. These firms understand their customers far better than many of our utilities and their friends in Lansing do.

Unfortunately, the rest of us are stuck. We can’t choose a power company that provides more clean energy.

Who wins in this charade about “standards,” “mandates,” and “markets”? Coal and gas extractors, which spend fabulous sums to help elect of fossil-fuel friendly lawmakers; utilities, which spend heavily to protect their ancient business models; and the lawmakers themselves, of course, who are happily parked at the receiving end of all of this largess.

Who’s losing? You, me, our workers and entrepreneurs, our broader economy, Michigan’s potential worldwide clean energy manufacturing leadership, and our air, land and Great Lakes.

The real market—ratepayers—wants more clean energy, and supports using standards or mandates to get there. Since utilities won’t act aggressively unless forced to, moderate Republicans, including Gov. Snyder, must look past their current, badly misplaced reverence for markets, join with Democrats, who strongly support clear and very doable renewable and optimization standards, and get this done. It’s the only way to provide trapped utility customers with what they really want—and what our economy and environment clearly need.

Jim Dulzo is the senior energy policy specialist for the Groundwork Center for Resilient Communities, formerly that Michigan Land Use Institute, based in Traverse City. Reach him at [email protected].

About the Author

Jim Dulzo is the senior energy policy specialist for the Groundwork Center for Resilient Communities, formerly that Michigan Land Use Institute, based in Traverse City. Reach him at [email protected].

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