Please read our letter to Rep. Nesbitt and his committee, below, and email your own note to [email protected], with “Clean energy comments for House energy committee” in the subject line. Then copy your note to your own state rep by clicking here and entering your address. You’ll get specific contact info.
April 29, 2015
Honorable Aric Nesbitt,
Chair, Michigan House Energy & Technology Committee
PO Box 30014
Lansing, MI 48909-7514
Dear Chairman Nesbitt,
We write on behalf of the 2,000-plus members of the Michigan Land Use Institute to comment on current Lansing energy policy positions and proposals, and on the need for renewable and efficiency standards.
We oppose the Nesbitt legislative package; we support the governor’s goals and those of the bicameral package released on April 23 by House and Senate Democrats. And we endorse the Democrats’ use of standards to attain those goals.
Michigan must set standards to help its companies keep up with the global energy revolution. From California and New Jersey to Brazil and China, states and countries competing with Michigan are setting policies that prompt their companies to invest in efficiency and clean energy manufacturing and generation, boost reliability, conserve resources, and protect the environment and public health.
Rep. Nesbitt’s proposals not only delay the day when the state’s two largest monopoly utilities fully embrace such changes, they make the state less appealing to many businesses. They hinder further progress on Michigan’s initial, highly successful, jobs-rich move to clean, renewable energy, which occurred only because bipartisan 2008 energy legislation required it.
Specifically, reclassifying waste burning as “renewable” energy defies the dictionary and common sense, and increases air pollution.
Freezing our current 10 percent renewable portfolio standard defies logic, given how readily and inexpensively our utilities met it; how many engineering, manufacturing, construction, and operation jobs it created; and how effectively it cut the cost of wind power and wholesale electricity.
Higher renewables standards will accelerate those positive trends. Clean energy manufacturers need market certainty, while many forward-looking companies in all business sectors prefer locating in clean energy-committed states because it is essential to their brand. Without an expanded RPS we will lose both kinds of firms.
Eliminating the energy optimization standard, the most successful energy policy in our history, would cost ratepayers dearly: Every EO dollar saves three to four utility and ratepayer dollars, employs Michigan contractors, and reduces dangerous pollution. Experience nationwide confirms that it takes EO standards to assure utilities act aggressively on efficiency. Without standards, they have little incentive to do so.
MLUI’s successful TCSaves residential efficiency program also confirms this. In our marketing efforts we found that families need utility incentives to engage in efficiency projects. Traverse City Light & Power and DTE Energy provided those incentives only because they had to meet EO standards.
We do support two parts of the Nesbitt package: Ending renewables surcharges, and expanding Integrated Resource Planning. But IRP must no longer be based on project cost thresholds. IRP must occur frequently, look beyond immediate project costs, and regard fuel price risks, EO measures, and environmental effects as paramount. The record shows that toothless, industry-based IRP accomplishes little.
This is why we not only support the governor’s and the Democrats’ 10-year renewables and efficiency goals, but also strongly support the standards the Democrats propose for getting us there. MPSC reports, the governor’s “no regrets” studies, and national research confirm those goals are attainable and will set us up for a reliable, affordable clean energy future.
We reject claims that standards or mandates are bad. It is plainly illogical to apply free market principles to monopolized utility markets. Michiganders clearly support and want clean energy, but they have no way to push providers to do so. Only you, our lawmakers, can do that.
Moreover, claims that, if wind power is so cheap, utilities will embrace it without standards ignore practical experience. Our monopoly utilities have a guaranteed profit margin largely based on their capital assets, and have 100 years experience with fossil-fueled power plants. So they have no internal incentive to move from that familiar world to clean energy. Only a standard reflecting what customers want—and what the global energy economy increasingly demands—will be effective.
Consider this: If utilities actually competed for customers, they would work hard to win the largest portion—those who want clean energy—by providing as much as possible at the best price. So, the Democrats’ 20-percent by 2022 renewables standard, which continues our clean energy build-out at its current pace, and an EO of 2 percent, makes economic, technical, and environmental sense.
Unfortunately this crucial issue is arriving at a late hour. Even with prompt, favorable legislation, renewables development will temporarily slow as the current standard expires in December. Capping RPS and eliminating EO will compound this situation, kill jobs and investment, and mark Michigan as a regressive energy state.
But here’s the bright side: Michigan’s manufacturing and research capacity and expertise are vast; its workers among the world’s best; the direction of the world toward clean energy unmistakable. Taking advantage of this within the clean energy sector promises a bright economic future. Ignoring it will only harm that future.
We urge the committee to act promptly: Set strong, clear, flexible renewable and energy optimization standards, and allow free enterprise to respond to those market signals, rather than to misapplied ideologies and monopolies deeply vested in a non-innovative status quo. Michiganders deserves the best from our utilities; requiring them to provide it is by far the quickest path to success.
This will benefit thousands of Michigan workers, businesses seeking stable energy prices, our utilities, and our Pure Michigan brand.
We welcome any response from the committee members, and will closely follow your crucial work on this issue in the coming months.
Senior Energy Policy Specialist