Today, Senator Mike Nofs, Chairman of the Michigan Senate Energy and Technology Committee, introduced his long awaited electricity policy package.
We are reviewing the details of the legislative proposals introduced by Senator Nofs, and will be prepared to make detailed recommendations over the next few days, and during this summer's hearings. NRDC appreciates the opportunity to have participated in the process and the hard work of everyone involved.
However, what is clear is that these bills offer a disappointing reversal of clean energy policies that put Michigan on the map as a state committed to lower electric bills, more jobs, less pollution, and healthier people.
1. Renewables: As rumored, under this legislation Michigan's wildly successful renewable energy standard would come to an end. The bill redefines "clean" energy as anything that does not violate federal clean air laws. The goal of this legislation is bare minimum compliance with federal environmental regulations, rather than maximizing the benefits of clean energy for Michigan's citizens and economy.
2. Efficiency: The current "energy optimization" standard, which has resulted in hundreds of millions of dollars in savings to customers over the last 8 years, would be continued at current levels for one year under the name "energy waste reduction," then the funding will be reduced to one-half the current funding limit for an additional two years, and finally that requirement would be eliminated in 2019. In its place will be a planning process that merely requires that demand-side resources be analyzed and considered.
3. Utility planning: Michigan's clean energy development would be determined through plans designed by the utilities and approved by the Michigan Public Service Commission. During this process, the utilities must demonstrate compliance with environmental requirements, and that the plan represents the "most prudent" way of meeting the state's capacity needs. Utilities would not be required to value environmental benefits of clean energy choices that would exceed compliance with the minimal federal requirements when weighing resource choices, nor would they be required to maximize the use of cost-effective energy efficiency.
The one major step forward in this legislation is its clarification that the Michigan Public Service Commission indeed may approve revenue decoupling for electric utilities. Revenue decoupling removes a major barrier to utility use of energy efficiency as a resource. The Commission's previous orders approving decoupling for electric utilities were invalidated by the Court of Appeals, which held that the Commission lacked clear legislative authority to issue those orders.
Earlier this week, Environmental Entrepreneurs reported that Michigan once again made its top-ten list for clean energy job growth, with the addition of more than 600 clean energy jobs in just the first quarter of this year. The existing clean energy standards have been a magnet for economic growth in the state, and the top priority for Michigan legislators should be to double down on that success.
Michigan's Governor Snyder has powerfully articulated the reasons why investing in energy efficiency and renewable energy is a no-regrets strategy for Michigan. Moreover, the state has painstakingly documented the enormous benefits that were achieved through clean energy policies on the books today, which Senator Nofs championed in 2008 when he served as a State Representative. There is a gaping disconnect between the vision articulated by these leaders, and the reality that will emerge if these bills pass as drafted.
It is our hope that this draft legisaltion is a starting place for discussion and not a final product.