Michigan Makes Critical Step Toward Cleaner, Cost-Effective Energy

Michigan took its first important step toward addressing climate change. With strong support in both the House and Senate, the Michigan legislature passed HB 5524 and SB 213, which significantly revamp Michigan’s electric utilities and require them to immediately begin helping their customers reduce the amount of energy they use while investing in renewable energy.

Gayle Miller, Michigan Legislative Director of Sierra Club observes "Michigan is currently facing an enormous risk from expensive, unneeded, dirty power. Eight new coal-fired power plants have been proposed for the state, along with one new nuclear plant. The package of bills that passed will require utilities to invest immediately in clean energy, reducing demand for these far more expensive energy options."

The comprehensive package contains many critical components. One such beneficial component is Integrated Resource Planning (IRP). "The IRP process will help ensure that Michigan gets the best deal for its energy investments by requiring full disclosure of all costs and benefits associated with each energy investment option," , notes Miller. "For example, using the IRP the Public Service Commission will be able to take into consideration the environmental costs of dirty energy and the job creation benefits of renewable energy and energy efficiency." Sustainable energy advocates are convinced that clean, renewable energy from wind, solar and efficiency will compete favorably against polluting sources of power with this new legislation.

The package also contains a Renewable Portfolio Standard (RPS), requiring electric providers to generate 10% of their power from renewable sources (like wind) by 2015. While the initial standard is small, the RPS is a step in the right direction. "Twenty eight other states have RPS policies in place and many of these states have already increased their renewable standard due to the cost-effective energy and good jobs their states have gained as a result," notes Miller. "Once renewable energy develops a cost-effective track record in Michigan, Sierra Club [and other renewable energy advocates] is confident that Michigan will quickly want to raise its RPS standard and reap the economic and environmental benefits of making Michigan a powerhouse of renewable technology and jobs."

While "Net Metering", a last minute addition to the package, will guarantee fair market price for independent power producers, the bills also contain the expensive provision of "De-skewing", as proposed by the Michigan Manufacturers Association, Michigan Chamber of Commerce and many Republican representatives. "De-skewing will raise residential rates by making homeowners pay relatively more for power than industrial customers," says Miller. "On balance, however, this package of bills will help the environment, ratepayers and Michigan’s economy."

For more information on the bills passed, visit www.legislature.mi.gov. For more information on the Sierra Club, visit www.SierraClub,org.