State lawmakers remain focused on passing energy policy this year that preserves Michigan’s limited electric choice market and abandons renewable energy standards in favor of comprehensive planning requirements.
Despite variables that may stall energy discussions this session — the Flint water crisis, Detroit Public Schools funding, an election year and the complex nature of the issue — one House lawmaker says the Legislature should be able to “walk and chew gum at the same time.”
“We have a lot of big issues in Lansing, but we also have a big issue in terms of energy that I feel we need to make a long-term, adaptable policy for the future,” said State Rep. Aric Nesbitt, a Republican from Lawton who chairs the House Committee on Energy Policy.
Nesbitt’s energy proposal — which keeps the 10-percent cap on electric choice and replaces a renewable energy standard with Integrated Resource Planning — was voted out of committee in November and awaits a vote on the House floor.
While key lawmakers in the House and Senate as well as Gov. Rick Snyder hoped to wrap up energy policy discussions last year, observers say it has taken longer than expected to familiarize lawmakers with the complex topic.
Still, Michigan utilities and others hope to see action taken sooner rather than later given the possibility of federal regulations on power plant emissions and pending coal plant closures.
In February, the U.S. Supreme Court halted implementation of the Clean Power Plan while the merits of the rules are challenged in court. The ultimate fate of the rules, however, remains uncertain in light of the passing of conservative Justice Antonin Scalia, who voted in support of halting the plan.
Meanwhile, Michigan’s 2008 energy law that mandated a 10-percent renewable standard by 2015 has leveled off, holding those policies in place.
“The reason for this legislation is to make sure we put Michigan in charge of our energy future instead of the federal government,” Nesbitt said of his energy proposal.
Senate Republicans also plan to continue hearings on their own energy proposal introduced by Sen. Mike Nofs, the Republican chairman of the Senate Energy and Technology Committee. That proposal also would keep the 10-percent choice cap, move to Integrated Resource Planning and adopt a new rate structure for solar net metering that critics argue would stifle the self-generation market.
Critics say both proposals place more regulatory burden on alternative energy providers and choice customers, effectively killing Michigan’s choice market through attrition. Clean energy advocates also oppose abandoning renewable energy standards because they say declining prices for wind and solar would be locked into the future for ratepayers under a percentage requirement.
Nesbitt said he has been “working very closely” with Nofs’ office and the administration as energy discussions progress. Nofs could not be reached for comment, but sources say he looks to have a revised energy package to present in the coming weeks.
A MATTER OF TIMING
Despite ongoing deliberations, there is still some skepticism over whether an energy agreement will be reached in 2016.
“Like all things, energy seems to keep taking a back seat to whatever hot issue is out there at the time,” said Larry Ward, executive director of the Michigan Conservative Energy Forum. “Last year it was roads funding, this year it’s the Flint water crisis and Detroit Public Schools. Energy seems to be always the bridesmaid, but never the bride. When will it be energy’s turn to be taken care of?”
He added that if a plan isn’t voted on in the next two months, the lame-duck session after the House elections in November “may be the next chance” to get it done. Nesbitt pointed out that the 2008 legislation cleared the Legislature two months before an election.
If a comprehensive package doesn’t move forward, Ward hopes lawmakers then will opt to make changes in a piecemeal approach.
Ward said “one of the sticking points,” particularly with business groups, has been over retail open access provisions and preserving competition for projects between independent power producers and investor-owned utilities.
Particularly, alternative suppliers hope to see a requirement maintained from the 2008 law that requires 50 percent of renewable energy projects to come through power-purchase agreements between independent generators and utilities.
The Small Business Association of Michigan also believes the choice market should remain, competition for generation should be available for third-party developers and that business groups are represented during the Integrated Resource Planning process.
Jim Holcomb, senior vice president and general counsel with the Michigan Chamber of Commerce, said “energy is absolutely a top priority for us” this legislative session.
“We want to make sure we enact an energy law that focuses on stability in the system, keeps costs low for all ratepayers and sustains the 10-percent choice market,” Holcomb said. He called Nofs’ proposal “a good approach.”