2008 Energy Law: What’s Changing in 2015?

Next year, several key provisions of the landmark 2008 Michigan energy law are set to expire.

This is a key turning point for our state, including local energy providers and Michigan energy consumers alike.

With the New Year just around the corner, we want to give you a quick update on the situation and provide a little background so you will be prepared to participate in discussions about these issues as they develops in 2015.

The Law: Basics & Background

In October 2008, the Clean, Renewable, and Efficient Energy Act (Public Act 295) was signed into law by then-Governor Jennifer Granholm (D). It took two years of legislative wrangling, but the final bill was passed by strong, bipartisan majorities in both chambers of the state legislature. The law:

The most important provision of the law is a mandate that 10% of all retail electric sales in Michigan must come from renewable sources by 2015, with interim targets in between. This is what is commonly referred to as the state’s “renewable energy standard,” or RES.

In 2012, a public referendum was held to expand the RES to 25% by 2025. The referendum would also have put a cap of 1% on annual rate increases. Despite strong public support for renewable energy, voters rejected this aggressive update to the RES by a large margin (63% voted against), largely because of its potentially negative impact on energy costs and the state’s economy.

Looking Ahead

What happens next is far from decided.

Both consumers and Michigan’s local energy providers support investment in renewable energy, which has had significant benefits for the state, including energy savings, jobs, and a better environmental outlook. At the same time—as the 2012 referendum made clear—consumers still struggling with a shaky economy are in no way eager to push too far, too fast and end up with unmanageable energy costs.

Throughout 2014, a state Senate working group has been hard at work studying the impact of the RES and developing ideas as to how to proceed. During the same time period, however, a small group of conservative legislators introduced legislation to repeal the RES altogether.

Further complicating the issue are the EPA’s proposed regulations from earlier this year. Set to go into effect in 2015, what these regulatory changes will mean for Michigan still remains unknown. We are facing an especially precarious situation because many aging power plants across the state—and for that matter, the entire country—will be closing next year under the EPA’s new rules. It is critical that any energy policy adopted in Lansing be flexible; allow for the most cost-effective production of clean, renewable energy; and avoid creating undue layers of regulatory burden that would make it difficult to keep electricity reliable and affordable for everyone in Michigan in the future.

When the new legislative session begins in January, we’ll have a better idea of the direction legislators—and our state—are headed in terms of renewable energy production.

Michigan Energy Providers’ Commitment

Michigan’s local energy providers support the 2008 standards, and have engaged in efforts to meet the interim targets established by the law, as well as the 10% goal.

Overall, they will invest nearly $3 billion in renewable energy projects—primarily wind and solar energy development—by the 2015 deadline.

AMP will continue to support renewable energy policies in Michigan that improve the economy, create jobs, revitalize communities, increase investment in innovative energy infrastructure, reduce fossil fuel dependence, and make our state cleaner, more efficient, and energy independent.

As always, we will keep you informed as the new state legislature continues to explore energy solutions that impact all Michiganders.