Integrated Resource Plans (IRPs) represent the best approach for Michigan to ensure we are able to draw on all available energy resources and produce cleaner energy for our future.
How Do IRPs Work?
IRPs use a centralized, comprehensive planning process to determine the most efficient, affordable, and reliable mix of energy sources, taking into account factors like reliability, cost-effectiveness, and impacts on the environment:
The Michigan Public Service Commission (MPSC) will be able to look at the entirety of Michigan’s energy strategy. Taking this “big picture” approach will help us maintain reliability. It will also ensure we continue to integrate cleaner energy sources like natural gas, wind, and solar, as well as sources like biomass and geothermal energy—or technologies we haven’t heard of yet—if and when they become viable.
A state-level IRP structure will introduce the right kind of competition into our energy marketplace, giving all energy sources the ability to compete on a level playing field to help keep costs low. Unlike the dramatic imbalances produced by the deregulated market or the market manipulation of the current subsidies and mandates, the IRP process will ensure all consumers—rather than just a select few—benefit.
The use of IRPs is a much more transparent process than current mandates, giving the MPSC and consumers greater visibility into how capacity decisions are being made and ensuring that the best interests of all consumers are represented in the process.
When the current renewable energy standard was put in place, renewable energy sources were not able to compete without the state requiring their use and subsidizing their costs. In the last seven years, however, wind power has advanced to the point that it can compete on its own and supply energy on a large scale cost-effectively. Solar power is becoming more cost-effective all the time. We believe a holistic planning process will move its development and long-term sustainability forward more successfully now than continued mandates and subsidies.
At the same time, our ability to produce clean, reliable, cost-effective electricity from natural gas has also advanced considerably. Michigan’s unique geography makes natural gas one of the best solutions to both our short-term capacity challenges and new federal emissions requirements.
As it stands today, out-of-state energy providers are not held accountable for guaranteeing they have the capacity to meet their Michigan customers’ energy needs. This, coupled with the fact that out-of-state energy companies also do not currently invest in our electric infrastructure, makes it incredibly difficult to ensure reliability and affordability for all Michiganders.
We also need to accelerate the diversification of our state’s energy mix, especially in light of the EPA’s latest plan to reduce carbon emissions. Over the next 50 years, the ways we produce electricity will change significantly. IRPs will best position Michigan energy officials and producers to adapt to as-yet unforeseen challenges and incorporate new and better technologies. Under an IRP system, Michigan will increase its use of renewable resources when it makes sense while also maximizing our use of natural gas and increasing energy efficiency—a key part of Governor Snyder’s energy plan.
Just as we shouldn’t arbitrarily prioritize one clean energy source over another, we shouldn’t restrict our ability to change course as technology evolves. We need an approach to planning for and integrating clean energy technologies that allows us to focus on the lowest-cost solutions for Michigan’s families and businesses at any given time.
Legislation Highlights Importance of IRPs
Both the Nofs-Proos and Nesbitt bills embrace IRPs because they:
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