Michiganders have cause for celebration today following Governor Rick Snyder’s energy policy announcement delivered this morning. The speech boasted the state’s smart, forward-thinking approach to adaptability, reliability, affordability, and protection of the environment. These remarks come as a refreshing example of what a Midwest state is capable and willing to do for the benefit of its citizens, economy, and country.
A few particularly encouraging points on energy efficiency, renewables, and pollution reduction made this morning illuminate areas of real progress and warrant special attention.
1. Eliminating Energy Waste
The Governor intends to break away from wasteful energy practices by looking at energy efficiency as a resource and allowing it to compete head to head with power plant builds. He recognizes that the best way to do this is to capture all cost-effective efficiency. In doing so, the state reaps large affordability and environmental benefits.
Steps Needed to Achieve This:
- Capturing all cost-effective energy efficiency/Removal of the spending cap— A framework to capture all of the potential for cost-effective energy efficiency removes arbitrary caps and biases against a least-cost resource option. If energy efficiency savings are less expensive to acquire than it would be to meet that same electricity demand by generating power in a power plant, transmitting it to a community and distributing it to customers, then the utility should not be limited from capturing that savings. Previously, utilities’ were restricted to spending no more than 2% of revenues on their energy efficiency budgets resulting in millions of dollars in savings left on the table. This commitment puts that money back in consumers’ pocket.
- Minimum energy efficiency targets—It needs to be clear that utilities will be required to keep delivering at least the current level of annual energy savings, which lowers electricity demand by 1% per year. A 1% floor ensures that moving forward utilities will not do less than they are already doing or only go after low-hanging fruit, but will strive to seize all energy efficiency opportunities. Current policy requires electricity savings of 1% of previous year's retail sales in 2012 and thereafter—a target that has been not only reached, but exceeded every year.
2. Capitalizing on Renewable Potential
A report commissioned by the Governor earlier this year revealed that Michigan can feasibly and affordably reach a 30% renewable energy standard. This morning he made clear that he will be chasing that potential on the road to a more affordable and healthier energy generation in Michigan. More investment in renewable energy is necessary for a more meaningful reduction in greenhouse gas emissions, provides greater economic development and job creating benefits for Michigan, and contributes to reliability by diversifying resource options.
3. Reducing Pollution
Michiganders can literally breathe easier knowing Governor Snyder has taken a stand to reduce mercury, acid rain, and other particulate pollution in the state. In addition to increasing investment in renewables, the Governor specified that a large piece of reducing pollution will also come from a commitment to seriously cutting coal consumption. This largely ties back to his priority of health. Poor air quality and the high costs of public health are threats in Michigan’s cities and the Governor is thoughtfully promoting a cleaner outlook for current and future generations.
The Gift that Keeps Giving
Michigan is taking the lead in demonstrating that each state has a vast, untapped potential to do more when it comes to an energy policy that is attentive to its communities and resources. Governor Snyder’s commitments indicate a dedication to an energy policy that is cleaner, more reliable, and gets the most bang for its buck for years to come. 2013 was a great year dedicated to gathering information on the state’s energy issues, but 2014 is primed to be even better as we work together to turn these goals into a reality.