LANSING – The Michigan House Energy and Technology Committee began exploring bills Tuesday that would expand the items considered renewable fuels and would allow natural gas utilities to expand their service territories.

But the bills saw objections from groups that argued, respectively, they would allow non-renewable resources to be considered renewable and would allow expansion of gas lines at the expense of existing customers and competing businesses.

The committee spent the most time on HB 5205 , which would classify certain plastics and other waste as renewable energy if they are converted to a fuel.

A substitute adopted Tuesday removed petroleum coke as one of the chemicals considered renewable.

“It’s meant to reduce the amount of materials we dump into landfills and reduce the cost of energy,” Rep. Aric Nesbitt (R-Lawton), chair of the committee and sponsor of the bill, said.

Craig Cookson, director of sustainability and recycling for the Plastics Division of the American Chemistry Council, said the plastics that are currently not recyclable still contain energy and can be used for everything from generating electricity to powering vehicles, depending on the technology used to extract that energy.

He said the materials placed in landfills every year in the state have enough energy to replace 15 percent of the coal the state burns for energy.

“Energy policy must embrace all viable energy sources,” Cookson said. “Recycling is just one facet of a well-integrated reuse system.”

Cookson noted that, over time, the pool of materials for such systems would likely shrink as more materials are able to be recycled. He noted that many plastics, like milk jugs, are currently more valuable recycled than they would be converted to energy.

Tom Horton with Waste Management said the bill would provide incentives to build those energy extraction plants and would allow his company to get additional value out of the materials it collects.

“We’ve lost the battle if we put it in the ground,” he said.

But Democrats said they are concerned that the bill would allow plastics to push out other renewable energy sources and allowed less environmentally friendly energy generation operations.

“There are going to be emissions with any process,” Cookson said. But he said reusing the materials for fuel reduces greenhouse gas emissions overall versus landfilling the plastics and using new coal or other fuels to generate power.

Rep. Collene Lamonte (D-Montague) raised concerns that considering the waste materials as renewable would reduce demand for wind and solar energy. “We’re at or nearly at our 10 percent standards,” she said. “How is this going to help you unless we increase those RPS standards?”

Nesbitt said the plan, particularly given the current state of the technology for converting the plastics to fuels, would allow the new materials to fill in as demand for energy increases.

“Hopefully, the economy’s going to continue to grow,” he said. “That means more megawatts are going to have to come online.”

“We don’t have any objection to that being included as advanced technology,” he said. “What we do have strong objection to is fossil fuel-based fuels are going to be considered renewable fuels.”

Clift said any biomass included in the conversion process should be given credit as renewable, but the rest should not.

The fuel pellets created from the plastics could also be used to keep some of the state’s less efficient coal plants open longer when they should be replaced, Clift said.

Nesbitt said each committee member would have to decide whether the new definition meets his or her goal for using renewables.

The natural gas bill (HB 5555 ) pitted agricultural interests against propane dealers on Tuesday.

Jim Byrum, executive director of the Michigan Agri-Business Association, said expanding access to natural gas is essential for agriculture to continue to expand. He said there have already been some grain process facilities told they cannot expand because existing gas lines would not handle the additional demand.

“If we don’t have access to natural gas, we quite frankly are very limited in what we can do,” Byrum said. “Those facilities are going to be located where there is solid infrastructure.”

But there are also some limits on how far away from the farms processors can economically locate their plants, he said.

The bill would allow utilities to spread the cost of new infrastructure among all customers, instead of charging the new customer for the cost of that extension as is current practice.

Wayne Kohley with the Michigan Propane Gas Association said the bill would potentially put him and his fellow distributors out of business.

“HB 5555 would enable gas utilities to expand into areas where it’s not cost effective by subsidizing by all existing customers,” Kohley said. “Existing customers see no benefits from the addition of the new customers.”

The benefit would also not be as large for the new customers as reports presented last week indicated, he said. Consumers Energy had indicated savings of $2,400 a year based on average use, but he said that report overstated use. He said savings would actually range between $860 and $1,240 a year.

Many could save even less if they are on a budget or price freeze plan that protects them from rate increases, he said.

Nesbitt said the point of utilities is to share costs. “This goes back to a basic utility concept that everybody has to be forced to be part of the utility,” he said. “It’s sharing in the cost of maintaining current infrastructure as well as enhancing the infrastructure.”

He and others noted that natural gas utilities have been replacing many of their distribution lines and the new customers would share in the cost of upgrading service to those existing customers.

Committee members also hit the propane group with questions about the current Department of Attorney General investigation into price gouging and the reports of people running out of propane this past winter because of lack of supply.

“We didn’t have any customer we didn’t deliver because we didn’t have product,” Kohley said, though he acknowledged delivering smaller amounts to some customers to ensure the available gas could spread across those who needed it.

And he said the group supported the pricing investigation. “If anyone did anything in terms of price gouging, we oppose that,” he said.

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