LANSING – Michigan’s electric and gas utilities are, in aggregate, surpassing the standards set forth in the state’s energy law overhaul, PA 295 of 2008, the Public Service Commission and Michigan Energy Office concluded in their final report on energy efficiency sent to Governor Rick Snyder Tuesday.

Energy Optimization programs have been cost-effective, costing less than one third of new electric generation, and Michigan has the potential to continue to cut energy waste and save millions of dollars in cost-effective energy efficiency, the pair noted.

The objectives of the utility energy optimization programs include delaying the need for new electricity generation, reducing emissions, encouraging local job creation, and reducing customers’ utility bills, the report said.

“Today’s report covers those topics and incorporates new material based on the public comments received after the electric efficiency draft report was issued on October 22,” Energy Office Director Steve Bakkal and PSC Chair John Quackenbush said in a joint statement. “With the inclusion of data from the two in-depth studies conducted by third parties, this report provides the Governor and the Michigan Legislature with the best available information as they prepare to discuss the role that energy efficiency programs will play in Michigan’s energy future.”

The latter adds more than 80 pages to the report that Snyder will review before addressing the state and Legislature around mid-December about how to lay out Michigan’s energy future. His recommendations will come as some provisions of the 2008 law are set to expire – or at the very least be outdated – by 2015.

The final “Michigan Electric and Natural Gas Energy Efficiency Potential Study,” compiled by engineer and consulting firm GDS Associates, is included in the final version of the report as Appendix B. The report found there is the potential for more cost-effective energy efficiency than would be carried out under current law, which limits the amount that can be spent on energy efficiency, the commission noted in its statement.

The PSC, DTE Energy and Consumers Energy worked together on the aforementioned study, which assesses electric and natural gas energy efficiency potential, and provides a roadmap for policymakers while identifying the energy efficiency measures with the greatest potential savings. Estimates of energy efficiency potential include technical, economic, achievable, and constrained achievable potential.

A separate report by Optimal Energy, “Options for Establishing Energy Efficiency Targets in Michigan: 2016-2020” is also a point of difference from the draft report issued on October 22.

Jim Byrum, president of the Michigan Agri-Business Association, applauded the findings.

“Michigan has the highest electricity costs in the Midwest, but we can help rein in these costs through energy efficiency,” Mr. Byrum said in a statement “Agriculture is one of Michigan’s biggest industries, and energy prices are one of the biggest costs of doing business. Increasing our use of energy efficiency will make Michigan agribusinesses more competitive by reducing our electricity consumption and reducing variable costs.”

Beyond other technical updates, the comprehensive report makes many of the same points as its draft counterpart. One of those major points is that natural gas utilities achieved 134 percent and electric utilities achieved 116 percent of their targets in 2011. Actual results for 2012 also indicate the targets were met, with natural gas utilities achieving 126 percent of their targets, and electric utilities achieving 125 percent of their targets, the report found.

Currently, Michigan’s Energy Optimization standard requires electric providers to ramp up energy savings to 1 percent of the previous year’s electricity sales in 2012, and natural gas utilities to ramp up energy savings to 0.75 percent of the previous year’s sales in 2012. The provisions in the 2008 law provide for the continuation of those savings through 2015, but after that, the efficiency savings targets would remain at 2015 levels under Michigan’s current law.

The final report is the last of four reports by the PSC and Energy Office, which came after a series of public forums seeking input on renewable energy, electric choice, energy efficiency, and other related topics.

IMPLEMENTATION OF UTILITY ENERGY OPTIMIZATION: The PSC also issued a separate report, required by law, detailing energy savings achievements, program highlights and administrative improvements that have been implemented by the commission.

Just as the report sent to Snyder had indicated, this report shows that overall, 2012 energy optimization program savings achieved for electric utilities was 125 percent of the target, and the 2012 energy optimization program savings achieved for natural gas utilities was 126 percent of the target.

“Statewide, Michigan energy optimization programs have exceeded the targets every year since 2009, and utility customers are benefitting,” PSC Chair John Quackenbush said in a statement. “For every dollar spent on energy optimization programs in 2012, customers will see benefits of $4.07.”

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com