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Sunday, 05 January 2014 20:39

Snyder wants to update Michigan energy policy, set goals for 2025

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Lawmakers in Lansing this year will be focusing on policies that will help secure Michigan’s energy future.

After taking 2013 to study the state’s challenges and opportunities in a few core energy areas including efficiency and renewable generation, Gov. Rick Snyder said he wants lawmakers to work with his administration and other state officials this year to draw up long-term policy goals that would be implemented in 2015.

“We’re not coming out with conclusions,” Snyder said in an energy roundtable in late December. “But in terms of the philosophy, it starts with … affordable energy with reliability and a ‘no-regrets’ policy.”

Snyder tasked John Quackenbush, chairman of the Michigan Public Service Commission; Valerie Brader, energy policy officer at the Michigan Economic Development Corp.; and Steve Bakkal, the director of the Michigan Energy Office, with directing the process.

Without a federal energy policy to build from, it’s important that Michigan’s policies have adaptability and flexibility, Snyder said.

In a statement from his executive office, Snyder listed four key energy-related concepts:

• Adaptability: The state should eliminate energy waste and reduce coal and replace it with newer, cleaner technologies such as natural gas and renewables. 

• Reliability: Michigan should become a leader in reliability by reducing the average number of outages and the length of those outages. Additionally, the state needs to ensure residents never experience massive outages related to a lack of supply.

• Affordability: Residential customers should spend less on their combined energy bills (electric and natural gas) than the national average. In addition, Michigan needs to ensure that energy-intensive industries have adequate supply of energy at favorable rates that allow them to compete.

• Protection of the environment: Michigan’s energy generation needs to be part of a healthier future, reducing mercury emissions, pollution that creates acid rain and adds particles to the air. Finally, Snyder called for an increase in the renewable portfolio based on relative cost, reliability and environmental benefits.

“Those are fairly aggressive goals,” he said.

Snyder emphasized that the energy decisions made now are long-term investments that will affect administrations after him. Importantly, a 10-year timeline extending out to 2025 should provide some certainty and consistency for the policies set in 2015, he said.

Those policies should focus on reducing consumer energy bills in Michigan to less than the national average by 2025, Snyder said, acknowledging that the discussion of how to get to that point needs to continue. Part of the solution is a focus on reducing energy waste, he said.

“We have to look at how we can avoid using energy we aren’t efficiently using anyway,” he said.

Snyder said he sees significant opportunity to reduce cost through the increased development of renewable generation.

“There is clearly opportunity to increase the amount (of renewables) we have in our portfolio and that means setting a range, which is a function of what’s cost-efficient and reliable,” Snyder said, adding that the state “should still be proud of what we achieved already.”

2015 is the benchmark year for Michigan’s current renewable portfolio standard, which was passed in 2008 and called for 10 percent of the state’s electricity to come from renewable energy.

While some groups have called for increased energy competition as a key driver to reduce costs, Snyder said the state shouldn’t jump to conclusions about whether the so-called “energy choice” movement is the best way forward.

Legislation to remove the 10-percent cap on competition has already been proposed in State House.

State Rep. Mike Shirkey, R-Clarklake, introduced legislation in early December that would create a fully competitive retail electricity market in Michigan. However, industry insiders MiBiz spoke with said even if the bill package does gain momentum, don’t rule out veto from the governor.

In response to Snyder’s non-specific message on the regulated energy monopolies, Energy Choice Now (ECN) released a statement encouraging the legislature to take action on the legislation put forward by Rep. Shirkey.

“Gov. Snyder discussed and is rightly concerned that our high utility electricity rates harm residential homeowners, discourage growth, business expansion and job creation and also make Michigan uncompetitive in attracting new business and industry,” Wayne Kuipers, executive director of ECN and a former state senator, said in a statement. “Michigan’s current cap prevents most Michigan customers from using competition to lower their electric bills’ electric rates.”

In contrast, many other groups came out in support of Snyder’s message. The Michigan Environmental Council (MEC) praised Snyder’s direction and reinforced the governor’s commitment to environmental protection.

A 2011 analysis commissioned by MEC found that the state’s nine oldest coal-fired power plants cost Michiganders $1.5 billion annually in health care costs and expenses.

“The devastating health consequences of primarily burning coal to generate electricity have long been part of our energy landscape,” Chris Kolb, president of Michigan Environmental Council, said in a statement. “We believe that concrete targets are key to keeping the momentum going, and we look forward to working with all parties to make that happen.”

Representatives from Michigan’s energy efficiency industry also offered support with hopes of growing the sector and increasing profitability for businesses in the state.

Overall, Snyder said that work on comprehensive energy strategy should be in place by 2015, but added that the topic is somewhat of a “rolling subject.”

“I’m being careful here because (2014) is an election year, and that can be challenging to get (things) done,” he said.

Read 6981 times Last modified on Thursday, 02 January 2014 13:03

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