Gov. Snyder has said he will sign the legislation into law.
Michigan Governor Rick Snyder plans to sign a set of sweeping energy bills passed by
lawmakers this week that stand to significantly boost renewable energy
investment in the state.
Senate Bills 437 and 438, which passed in the House of
Representatives Thursday, will raise the state’s renewable portfolio standard
(RPS) from 10 percent to 15 percent by 2021 and retain the state’s energy
optimization standard (1 percent annual efficiency improvement for
electric utilities) through 2021. It also boosts incentives for utilities to
hit higher efficiency targets, and sets a nonbinding goal to meet 35 percent of
Michigan's power needs through a combination of renewable energy and energy
conservation by 2025, Crain's Detroit Business reports.
Michigan achieved its 10 percent RPS target at the end of
2015, which led to the development of more 1,660 megawatts of renewable energy
capacity and attracted nearly $3 billion in renewable energy investments to the
state since 2008, according to the national business group, Advanced Energy
Economy (AEE).
The vote “reaffirms to the advanced energy industry and
their customers that Michigan is open for business,” said J.R. Tolbert, AEE’s
vice president for state policy, in a statement. “By increasing Michigan’s RPS
to 15 percent of annual retail electricity sales, the state has the potential
to attract an additional $2.5 billion to $4.3 billion in renewable energy
investment by 2021.”
Final versions of the bills also rejected utility-backed
proposals to eliminate net metering and implement a buy-all, sell-all policy
where distributed solar customers are required to sell 100 percent of the
electricity they generate back to the utility. Solar advocates say this model
creates hidden taxation for customers. The bill also directs the Michigan
Public Service Commission to establish a distributed generation tariff process,
according to The Alliance for Solar Choice (TASC).
"We still have serious concerns over how the
distributed generation tariffs will be calculated based on the language in the
bill,” said TASC spokesperson Amy Heart. “It will be critical for the
commission to take into account the benefits that individual investments in
rooftop solar and other distributed resources provide, such as increasing
energy security and reliability and reducing other utility spending.”
Michigan currently ranks 34th in the nation in terms of
installed solar capacity with a total of 25 megawatts -- 13 megawatts of which
are residential, with 11 megawatts being commercial and just 1 megawatt being
utility-scale. With stable and fair policies, TASC anticipates strong solar
market growth, more jobs and lower energy bills for customers across the state.
The Michigan legislation also addresses the state’s
“electric choice” market, which allows alternative and out-of-state energy suppliers
to serve up to 10 percent of the electricity market, typically schools and
large businesses. The state’s major utility companies, DTE and Consumers
Energy, have spoken out against the electric choice program and sought
legislative changes to impose a “capacity fee.”
The Detroit News reports: “Utilities have argued
alternative suppliers are not helping to fund investments in the energy grid
they rely on, leaving traditional customers to essentially subsidize the
network. But critics feared proposed capacity fees could have made choice rates
for business and schools uncompetitive or forced them back to DTE or
Consumers.”
The new legislation retains the 10 percent cap on electric
choice customers, and establishes clear parameters for utility regulators to
determine if a fee becomes necessary. Eventually, the choice market could
shrink below 10 percent if a large number of customers decide to leave it.
"We now have a statewide energy policy that will save
Michigan residents millions of dollars on their electric bills, alleviate
concerns about having enough capacity to power the daily activities of 10
million people and find new ways to use our existing energy grid more
efficiently,” said Gov. Snyder, in a statement. “Our energy will be more
affordable, more reliable and more green. This achievement continues sending
the message that Michigan has a very bright future."
Gov. Snyder helped to broker compromise on the energy bills
in an overnight legislative session.
He told reporters this week he would sign the
legislation.
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