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The 3 Fs of a Michigan-First Energy Policy: Fairness, Future, and Flexibility

Fairness.  Future.  Flexibility.  Any energy policy Lansing enacts this year should address each of these key considerations. 

Our legislators continue to discuss how to chart the best course for Michigan’s energy future, and AMP is continuing to make an impact in the debate. Over the next few weeks we will be taking a closer look at how specific aspects of proposed legislation help achieve the 3 Fs— fairness, future, and flexibility —for Michigan’s current and future energy needs.

Fairness

Fairness is the top priority for AMP—and we’ve discussed before what fairness means in terms of Michigan’s energy policy. 

Preventing Cost Shifting Under Deregulation

Michigan’s current system of partial deregulation is a case of the government picking winners and losers among consumers.  Ninety percent of Michigan energy consumers have unfairly subsidized the 10 percent of electric consumers participating in the deregulated market, costing them upwards of $1.8 billion over the past seven years.  This system is not only unfair, but it is also unsustainable. 

Both the Nofs-Proos package in the Senate and the Nesbitt bills in the House offer solutions to restore fairness to the retail electric marketplace:

  • Ensures that out-of-state energy providers and their customers invest in Michigan’s electric infrastructure.
  • Guarantees all Michigan energy consumers have the capacity they need not just now, but in the long term.
  • Maintains the commitment made to current participants in the deregulated market by allowing them to continue to purchase power from out-of-state providers.

Preventing Cost Shifting under Net Metering

Michigan’s net metering policy unnecessarily shifts the cost of maintaining our state’s electric grid from rooftop solar panel users to the rest of Michigan energy consumers.  Essentially, net metering mandates that the vast majority of energy consumers in Michigan must pay more so only 1,800 homeowners can get a special break.

Moving forward, we need legislation that ensures we are incorporating renewables in a way that benefits all Michigan consumers, not just a select few.

Future

Perhaps most importantly, Lansing needs to pass energy policy now that ensures Michigan remains firmly in control of our energy future. Due to a combination of existing federal regulations and aging facilities, how Michigan and the rest of the Midwest generate electricity will see a fundamental change over the next decade.

Here are the facts:

  • In the coming year, Michigan will retire nine coal-fired power plants—enough to provide power for one million Michiganders.
  • By 2020, we will see a total 25 generating units close down statewide, or enough to provide power for more than two million Michiganders.
  • Throughout the Midwest, reports indicate that 100 power plants will be closing down in 2016 and around 300 by 2020.

Given all the challenges we face in the coming years, it is more important than ever that our leaders in Lansing pass legislation that allows us to most effectively plan for our future energy needs.  For Michigan, that means not relying on energy leftovers from other states, but encouraging all energy providers to make the necessary investments in the next generation of Michigan-based power plants.

Flexibility

Meeting Federal Standards

The EPA’s new plan for reducing carbon emissions underscores the need for Michigan to act swiftly to put together a state plan for complying with these new rules.

Fortunately, Governor Snyder’s administration has indicated that Michigan is on track to create and implement its own carbon reduction plan in a way that allows our state to comply with these new standards and continue to meet our unique energy needs.

Without our own state plan for reducing emissions, we will be forced to follow one imposed on us by the federal government.   A one-size-fits-all plan from Washington, D.C., won’t provide the same flexibility for Michigan to move forward in a way that protects reliability and affordability for Michigan families and businesses.

Integrating Renewables Wisely

In light of the EPA’s new rules, integrating clean and renewable energy sources will be increasingly important as we look for ways to create a more sustainable energy future.

Overlaying new federal environmental regulations with potentially redundant or even conflicting state renewable mandates creates confusion, threatens reliability, and jeopardizes affordability for all Michiganders, which is why we need to transition away from arbitrary mandates toward comprehensive, long-term planning through IRPs.  

IRPs will enable our state to plan for energy needs over the long term—in 5-, 10-, and 15-year increments— enabling Michigan to adapt to new technologies,  take advantage of emerging market trends, and keep energy affordable.

As our legislators continue to work through the legislative process, it’s up to us to ensure the legislation they pass reflects the 3Fs: fairness, future, and flexibility.

Send your legislators a quick email now. And stay tuned for further installments in our 3Fs series.  Next Up: The 3Fs of Integrated Resource Plans.