A Clean Energy Carol for Michigan

Matthew Paulson

Part of NRDC's Year-End Series Reviewing 2018 Energy & Climate Developments

The holidays are upon us once more, which means it’s time to cherish who we have in our lives and give back what we can. It’s also a time to reflect on progress made since last year. When it comes to climate and clean energy, Michigan is not exactly a Scrooge, but there can still be something learned with a visit from the Ghosts of our Energy Past, Present, and Future.

Ghost of Energy Past

Ten years ago, Michigan looked very different. Rich Rodriguez was coaching the Wolverines in his first season. The state went blue in the Presidential election. We were in the midst of a deep recession. On the energy front, then-Governor Jennifer Granholm had just signed into law Public Act 295, the Clean, Renewable, and Efficiency Energy Act, which included a renewable portfolio standard of ten percent by 2015 and an energy efficiency standard ramping up to .75 percent savings for gas and one percent savings for electricity by 2012 and sustained through 2015. Granholm believed the legislation could drive a much needed clean energy economy that would help create jobs and “transform Michigan from the rust belt to the green belt.” It was an ambitious goal.

In 2009, during the legislation’s infancy, fossil fuels (gas and coal) made up roughly 73 percent of the state’s net generation. Renewables were nearly imperceptible in the mix with wind generation making up only .29 percent.

S&P Global Market Intelligence

Not shown in this chart is the contribution from energy efficiency programs. The initial 2009 target for energy savings was equal to only 0.3 percent of total annual electricity sales. The hope was to learn by doing, prove the concept, and then steadily ramp up and sustain one percent savings between 2012 to 2015. In the early days, DTE and Consumers ended up investing a combined $49 million dollars ($4 million of that for low-income programs) resulting in $233 million in benefits, for a net electric bill savings of $184 million.

Ghost of Energy Present

This year marks ten years since the Clean, Renewable, and Efficiency Energy Act was signed. Below, we see that in 2017 the percentage of coal powered generation has been cut nearly in half since 2009. This is a huge victory considering how carbon intensive coal powered plants, how much carbon from the energy sector contributes to climate change, and how disproportionate the effects are for vulnerable communities. But this is not the end of the story. It is an important first step, but fossil fuels still make up over 61 percent of the state’s generation thanks to gas sharply increasing its share from 8.62 to 23.85 percent. We must avoid locking ourselves into another decade of fossil fuel dependence by becoming too gas-happy and instead continue to build out renewables like wind, which saw a more than ten-fold increase from .29 percent to 4.52 percent.

S&P Global Market Intelligence

On the energy efficiency front, customers have saved $3.3 billion cumulatively through efficiency programs that have only grown since 2009. Furthermore, the recently approved plans will invest a combined $222 million per year, resulting in over $1 billion per year in electricity cost reductions, for net bill savings of over $800 million annually.

In the last decade, utilities have also increased investment and improved the design of low-income programs thanks in large part to input from the Energy Efficiency for All project, and it’s the local Michigan coalition which works on making Michigan’s multifamily housing healthy and affordable through energy efficiency. From 2009 to 2016, combined Consumers and DTE investment in low-income single family and multifamily programs rose from $4 million dollars per year to $11 million dollars per year and their recently approved plans will spend more than $17 million per year from 2018 through 2021.

The growth in energy efficiency and renewable investment is mirrored by a huge growth in clean energy jobs. Former Governor Granholm must be happy to know that as she envisioned, Michigan is carving out a robust clean energy economy for itself. Michigan’s clean energy workforce now employs more than all the waiters and waitresses, computer programmers, lawyers, and web developers in Michigan combined, according to Department of Labor Employment Statistics. This includes jobs in heating and cooling, advanced transportation, solar installation, manufacturing, management, and more. In fact, this year Michigan celebrates leading the Midwest in clean energy jobs with over 122,000 jobs.

Ghost of Energy Future

Michigan has made a significant shift away from coal powered generation in the last decade, but the outlook for the next decade will be dictated by what replaces those coal plants. We must transition faster and more equitably toward energy efficiency and renewables than ever before in order to reach our climate and clean energy goals and protect our vulnerable communities. Signaling a step in the right direction, Consumers Energy recently filed a long term energy planning proposal that showed a future where renewable energy, energy efficiency, and demand response replace their coal retirements to make up a combined 57 percent of total generation by 2030. Next year, DTE will have to submit their long term vision as well and we will expect no less from them.

Our utilities are a big part of the power sector transformation equation, but we also need state and federal policies that provide market certainty and support to utilities, industries, and customers alike. If collectively we can bring to bear the lessons from our past and present, our Ghost of Energy Future will be happier, healthier, and wealthier for all.

Happy holidays!

About the Authors

Ariana Gonzalez

Director, Equitable Policy, Climate & Clean Energy Program

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