Michigan’s bipartisan 2016 energy law put us on the right path to reducing carbon emissions through multiple strategies:
Building a clean energy future that works with Michigan’s unique climate, geography, and economy requires careful planning to ensure all the pieces of the strategy work together.
With a comprehensive approach, we can make our energy cleaner and keep it affordable and reliable—24 hours a day, 7 days a week.
Renewables in Michigan will continue to grow as we make the transition to a cleaner energy future. If citizens and businesses want to invest in private renewables, like rooftop solar panels, that’s great, but private solar developers shouldn’t expect the majority of Michigan’s energy consumers to subsidize their business, especially when other solutions provide more universal access to the benefits of solar and achieve Michigan’s clean energy goals more efficiently.
There’s a right way and a wrong way to expand renewables for our state. Our state’s energy strategy should stay focused on the fairest, most efficient, and most cost-effective approaches to expanding renewables. Universal renewables win that contest hands down.
Private generation is part of our electric system now and will be in the future, but private solar should compete on a level playing field with other sources of energy. Making private solar the focus of our energy strategy could lead to energy insecurity, cost spikes, and reduced energy efficiency across the state.
Michigan’s energy policies should treat all consumers fairly. The policies special interests are advocating for do not protect fairness for all Michiganders.
Unnecessary Subsidies and Special Deals
Private solar users should be fairly compensated for energy they feed into the grid, but they should not be subsidized by other consumers. The MPSC moved to replace outdated “net metering” policies for private solar with a more equitable reimbursement model. Now, however, some legislators in Lansing have proposed legislation that would take our state backward, putting at risk Michigan’s electric grid and our path toward a cleaner, reliable, and affordable energy future for all Michiganders. The proposed legislation gives generous subsidies to the private solar industry and, in doing so, shifts the costs of paying for the grid and critical infrastructure improvements onto everyone who choose to not have private solar panels on their homes or businesses. These bills would have Lansing picking the winners and losers in the market—and ultimately among consumers.
Michigan’s Renewable Portfolio Standard (RPS) mandates local energy providers to produce a percentage of their energy from renewable energy sources.
Our 2016 energy law increased the state’s RPS from 10% in 2015 to 15% by 2021. Our local energy providers are already on track to exceed that.
The 2021 deadline in the 2016 energy law is not arbitrary—it coincides with full implementation of the integrated planning process and is meant to signal moving away from the RPS in favor of a more comprehensive approach.
The RPS accomplished what it was intended to: help renewables mature to the point that they could play a meaningful role in our energy supply. But it is an outdated policy, and it loses sight of the larger goal—carbon reduction.
Getting too focused on renewables for their own sake could actually constrain clean energy and carbon reduction efforts by boxing local energy providers into a prescriptive approach. We need flexibility to pursue the most efficient, fair, and cost-effective solutions available at any given time.
Congress enacted the federal Public Utility Regulatory Policies Act of 1978 (PURPA) to help diversify our energy mix by promoting new energy sources, including renewable energy. The federal law established requirements, but the states are responsible for determining how to implement the requirements.
Changes in the energy landscape in the past 40 years have led to artificially and unnecessarily higher energy costs for some consumers because PURPA has not been modernized to reflect those changes.
PURPA state implementation guidelines could require local energy providers to lock in fixed, non-negotiable, decades-long contracts with private energy companies at significantly higher rates than what it actually costs them to produce the energy they supply.
This mandate could lead to a glut of high-priced energy on the grid, which means that costs go up for Michigan homes and businesses with no benefit.
Here’s what PURPA can mean for Michigan if it’s not modernized and implemented correctly:
The long and the short of it is—PURPA isn’t working as it should anymore. Two things need to happen to address this challenge: