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Sunday, 22 December 2013 21:00

Energy forecast: Bruce Goodman, Partner, Varnum LLP, Grand Rapids

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An active participant in the statewide discussion of energy and the environment, Grand Rapids attorney Bruce Goodman serves as secretary for the Michigan Energy Innovation Business Council and is a founding member of the West Michigan Energy Group. Goodman also serves as the lead organizer for the Ford Energy Lecture series held in Grand Rapids and Ann Arbor. Goodman spoke with MiBiz about the opportunities and challenges in the energy marketplace going into the new year.

What’s your outlook for Michigan’s energy industry? 

Looking at the electric industry in Michigan, I think the investor-owned utilities will continue to try to keep to the old model in which they control the generation, the purchase, and the distribution of electric energy. Municipal utilities are apt to take advantage of some of the changes in the marketplace, as they have already demonstrated, and move more toward renewables. Customers are going to begin moving into self-generation in a much bigger way as the cost of solar energy continues to become more and more attractive. Government is going to look more toward energy security by encouraging energy efficiency and distributed energy.

What kind of statewide energy-focused legislative action, if any, should we expect to see this year?

There is likely to be some pressure to pass legislation to make it more difficult for self-generation to gain a larger foothold in the state. We see rumblings in other states about solar energy not paying its fair share. This is similar to the rumblings about electric cars not paying their fair share of gasoline taxes. This may make a certain type of legislation more likely — legislation to increase the RPS in exchange for more barriers to self-generation and reaffirmation of the 10-percent cap on competition.

State Rep. Mike Shirkey (R-Clark Lake), the vice chair of the House Energy and Technology Committee, recently introduced legislation to completely remove the 10-percent cap on electric competition in the state. Does it have a chance to pass?

It may pass one or both houses, but if it does, watch for the potential of a veto by the Governor.
 
Do you think Michigan’s renewable energy sector will continue to be dominated by wind development or do you think solar and other options will raise their profile?  

I think biomass will begin to play a much larger role as a share of the renewable energy component. It can provide 24/7 electricity, thus be operated as a baseload plant. We have lots of biomass, including timber that can be grown as an energy “crop.” Solar will also play a much larger role. It has the advantage of involving no moving parts, delivering energy during the time of day when energy is most in demand, and being easily installed across a wide variety of locations and a large variety of sizes.

It seems as if more energy efficiency programs and outsourced energy managers sprouted up this year. What’s the potential for this part of the energy market to expand?  

Energy efficiency is the cheapest source of “new” available energy. Recent statistics show that for every $1 spent, there is a savings of $4. The Michigan marketplace is ripe for huge expansion in energy efficiency with huge benefits to all ratepayers. It would be easiest to implement on new construction, and so changes to the energy code would help realize these benefits in the near term, rather than waiting for retrofits. Michigan should consider aiming to hit the energy efficiency of New York, a state with a similar climate.

In your work with renewable energy companies, what do they tell you are the biggest impediments to launching, growing and sustaining their business? 

Financing.
 
What should companies in the energy sector be paying attention to at the national level that could or will impact their business?  

Everything points to the inevitability that aged coal plants will be shut down. This is in part due to national environmental policies. Unless and until there is an energy shortage, there will be little pressure to change those policies. Environmental policies are acting like the carbon tax that appeared to be in the works in 2008, but which never got traction in Congress.
 
What’s one thing you see happening in the energy sector that could surprise everyone in 2014? 

The investor-owned utilities could change their business model and decide that their future is in leasing 10,000 rooftops and installing distributed energy in the form of solar panels, backed up by gas-fired generation. Whether that is natural gas or Michigan-centric biogas would be another area for a surprise.  

Interview conducted and condensed by Elijah Brumback

Read 3117 times Last modified on Sunday, 22 December 2013 21:29

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