LANSING – The Citizens Research Council on Friday said the state is the least aggressive in its pursuit of renewable energy attainment, but also raised some questions as to the implementation of the proposal that would increase the Michigan’s renewable energy standard to 25 percent by 2025.

“Notwithstanding that 13 states have not adopted either renewable energy standards or goals, Michigan’s aim to have at least 10 percent of the state’s energy from renewable sources by 2015 is among the least aggressive,” the report said, referencing current law. “A 25 percent standard by 2025 would put Michigan in the company of many of the other states that have adopted standards or goals.”

Proposal 12-3 would mandate in the Constitution that at least 25 percent of each electricity provider’s annual retail electricity sales be derived from the renewable sources of wind, solar, biomass or hydro power, but because “electricity is not color coded or tagged in a way that monitors or consumers should know its source,” the report said, it could create some challenges as to the monitoring of retail sales.

If passed by voters, the Legislature would have discretion in determining how the cost-containment mechanism would be implemented, as well as how much of a utility’s retail energy came from renewable sources, the report said.

Additionally, the report said, is the challenge of cost-containment built within the mandate. “Should related costs include only the facilities used to generate renewable energy – windmills, solar panels, etc. – or should it also include costs related to transmission and monitoring?” it questioned. “Should those costs appear as a separate line item on consumers bills or will the utilities be permitted to continue billing practices without independent itemization?”

In terms of cost to the consumer, the report agreed with proponents that “it is expected that the cost of electricity will continue to increase in Michigan with or without adoption of this proposal,” noting that supporters think the proposal may actually slow the rate of increase.

But opponents pointed to another item in the report.

“The CRC’s report validates what we’ve said all along: Proposal 3 ‘will not keep increases in total electricity bills to 1 percent per year,'” Megan Brown, spokesperson for the opposition Clean Affordable Renewable Energy said in an e-mail.

The proposal also dictates that compliance with the clean renewable electric energy standard “shall not” cause rates to increase by more than 1 percent in any year as well. Such a restriction, the report said, would not hinder the ability of electric utilities to recoup the cost of producing or obtaining electricity from non-renewable sources such as coal or nuclear power.

The cost to utilities would vary. Though larger corporations like DTE Energy and Consumers Energy – key opponents to the proposal – would likely have an easier time of rebounding, a 25 percent mandate for electricity cooperatives would hit a little harder, the report said.

“The ability of any of these entities to generate at least 25 percent of their energy from renewable sources is questionable,” the report stated. “The ability to purchase renewable electricity will depend on surplus electricity being available from Michigan generators of that power. The potential premium charged for that energy will threaten the financial position of these entities, and may in the end threaten their existence.”

But because the proposal also allows electric utilities to seek annual extensions for meeting the standard, utilities could use that option if they demonstrate such a need, Douglas Jester, principal of 5 Lakes Energy and policy analyst for proponents Michigan Energy Michigan Jobs, said.

“Most of Michigan’s municipal and co-op utilities purchase their power wholesale,” Jester said. “Those that buy wholesale can buy renewable wholesale, so it should not be a challenge for them provided it’s on the market for them for those who generate it.”

The report said the cost of electricity in Michigan has not increased since the 2008 Renewable Energy and Energy Optimization Standards Act was implemented, attributing that to several factors, including a reduction in energy demand and the declining cost of natural gas.

Yet the report also makes the case against coal by saying that new federal regulations will require that coal be burned using technology that creates cleaner combustion, which means accelerating the need to replace or retrofit coal plans, as well as additional investments in new technology.

As of 2010, the state’s reliance on coal lay at 58.4 percent, the study found. Nuclear energy followed at 26.4 percent, natural gas at 10.9 percent, and renewables made up less than 5 percent of the total energy generated.

The report said the state could stand to gain by spending less on importing coal, especially as part of the proposal encourages pro-Michigan employment policies in building the facilities and renewable energy sources. The state’s manufacturing base could also “position the state to produce the resources needed for renewable energy in other states,” it said.

The report also cautioned, “If additional locations are needed to garner the energy needed to produce 25 percent of the total from renewable sources, the ability of local residents to provide input on the locations could be set aside,” requiring the state to supersede local zoning.

“We don’t agree with that assertion because to fully realize the 25 by 2025 proposal will only use less than 10 percent of our on-land wind potential,” Mark Fisk, spokesperson for the campaign in favor of the proposal, said.

Opponents welcomed this assertion.

“It could trample local governments’ zoning rights, and it’s unlike anything ever inserted into the Michigan Constitution – or the constitution of any other state, for that matter,” Brown said.

Finally, the report said Michigan had a “seemingly average” capability for electricity generation via the means of the proposal, though potential for any renewable depends largely on where the state is placed. “Still, Michigan has a relatively decent potential for all three of these technologies in comparison with the rest of the country,” it said.

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