LANSING – Though he did not give specific recommendations, Governor Rick Snyder received mostly praise from various energy policy interests around the state and region on Thursday after hosting a roundtable in Detroit, saying he hopes to have a comprehensive plan by 2015 on the state’s energy policy for goals spanning a decade.
Snyder stressed adaptability, reliability and affordability in his discussion, and mostly discussed at length the need to set aggressive goals on energy efficiency, especially considering how much the state has saved in its current policy.
“One thing I really want to focus on is how do we reduce energy waste? How do we avoid using energy we aren’t using anyway? Let’s avoid energy waste and be thoughtful about how we use energy.
“We want (a policy) of affordable and reliable energy with no regrets,” Snyder said, pointing to the lack of dialogue on energy policy at the federal level and how any change in those policies could consequently affect Michigan.
Both Clean Water Action and a representative for the Beyond Coal campaign from the Sierra Club expressed disappointment in any lack of specific direction, though.
“Governor Snyder has done his due diligence and studied this issue intensely for over a year, now it’s time to lead,” said Tiffany Hartung of the Beyond Coal campaign. “He must take action now to ensure that Michigan’s clean energy economy will grow and thrive.”
Snyder said the state should seek to be in the top 25 percent in the nation in terms of energy reliability, and being in the top half in the nation when it comes to how long any outages last (the shorter the better, of course). It was not immediately clear where Michigan currently falls with regard to other states.
Cost is another factor to be considered in all potential policies, he said.
“Right now we’re above average (in the nation) in terms of cost. We have higher rates currently, but we also use more energy,” Mr. Snyder said. “To be blunt, we waste more energy.”
Reports issued by the PSC and the Energy Office show that Michigan can double its current energy efficiency standard in a cost-effective manner, Rebecca Stanfield, Midwest program policy director for the Natural Resources Defense Council, said.
“We think (his message is) a big step in the right direction,” she said. “We need to stop debating at this point whether or not to take action to achieve these goals. The attention instead needs to turn to how, and the implementation.”
Patty Birkholz, a Republican former state senator who participated in the 2008 law drafting the current renewable portfolio standard and now serves as the West Michigan director for the Michigan League of Conservation Voters, added to that point.
“If state legislators stall on strong energy policies, we stand to lose the jobs and savings generated to date. Today’s announcement creates the traction needed for progress straight out of the gate next year,” she said in a statement.
And Michigan’s best bet is clean energy, Stanfield said.
“While he has stopped short of making specific policy recommendations, it is critical that he has his sights set on the right goals: maximizing energy efficiency and ramping up clean renewable power to meet the state’s electricity needs,” she said. “We’re looking forward to taking the next step: writing and implementing a policy blueprint to achieve those goals.”
Snyder did say there is an opportunity to really reduce the amount of coal the state uses, and he is excited to see that dependency decrease, he said.
The expectation is to phase out coal-burning power plants, though that responsibility will be deferred to the PSC, which will work with the utilities on that matter, he said.
“I don’t think there’s any disagreement there will be a significant reduction of coal plants in the next 10 years,” Snyder said.
Currently, the state gets more than half of its electricity from coal, Rory Neuner of MI Air MI Health said, but it has to import all of that coal.
“Dangerous pollution from coal-burning power plants impacts the health of Michiganders around the state,” Neuner said in a statement. “I commend Governor Snyder for making the transition from coal to clean one of his priorities. It will reduce illness, help rein in health care costs and ultimately save lives.”
The Michigan Environmental Council agreed on the benefits of moving away from coal, pointing to a 2011 analysis the MEC commissioned that found the state’s nine oldest coal-fired electric plants cost residents $1.5 billion annually in health care and cause 180 premature deaths, 233 hospital admissions or emergency room visits, 68,000 asthma exacerbations and 72,000 instances in which children were restricted from school or some other activity.
“All Americans, including people of faith, need our governors to pave the way,” Keith den Hollander, chair of the Christian Coalition of Michigan, said in a statement. “It’s archaic in this millennium to think that Michigan still gets nearly 60 percent of our electricity from coal – which we pay to have shipped in. Expanding Michigan’s use of clean energy will build upon our manufacturing strength, talent and know-how, encourage innovation and put Michigan workers back on the job.”
RENEWABLES, NATURAL GAS: But on that point of clean energy, and more specifically renewables, Mr. Snyder said only that “setting a range” would be within his purview given the need for adaptability to changing markets and changing policy, especially at the federal level.
He said onshore wind provides the bulk of resources from which Michigan would benefit and he expected that could continue to take the lead in any renewable energy policy discussion.
Currently, the state has a 10 percent renewable energy standard that is required of all utility electric generation, though reports by the PSC and the Energy Office suggested the state could up its policy to 30 percent through what is currently being drafted by utilities. Asked of that aspect of the report, Snyder again said, “It’s really about setting a reasonable range.”
And Mr. Snyder did not leave forms of energy like natural gas out of the mix. To that, the federal government noted through the U.S. Energy Information Administration that “Michigan has the most underground natural gas storage capacity in the nation, and, based on reserves, one of the top 20 natural gas fields.”
Snyder reflected this in his discussion, saying Michigan is “a model for fracking done right,” referring to hydraulic fracturing for natural gas extraction. He said the state will not stand still in that practice, either, as it continues to monitor upcoming technologies and developments to possibly implement.
Steven Frenkel, director of the Union of Concerned Scientists Midwest office, said the governor was right to recognize the risk of continuing Michigan’s dependence on coal, but was leery about his proposals on natural gas.
“His plan could accelerate the state’s transition to a more sustainable energy system based on home-grown resources such as wind power and energy saving technologies,” Frenkel said in a statement. “The governor’s goal to expand the state’s clean energy use will benefit Michigan families and businesses, but the plan’s reliance on natural gas will continue a risky dependence on fossil-fuels.”
ELECTRIC CHOICE: Snyder spent little time discussing his opinion on whether the state’s electric choice cap should be eliminated and the state’s electricity market deregulated, though he did say he had “a level of concern about people bouncing back and forth” from one provider to another.
“I think that’s one of the reasons I want to make sure we’re taking our time on this,” Snyder said, adding that affordability and reliability remain a greater focus. “I don’t jump to choice as the solution to that. I jump to the appropriate rate structures and ways to be competitive.”
Steve Transeth, senior policy director for the Michigan Jobs and Energy Coalition, which opposes full deregulation, said the following of Mr. Snyder’s comments in a statement: “This comprehensive policy review will help establish a strong foundation that best serves the families and businesses in our state for years to come. We support the advancement of clean energy and improved energy efficiency, and the success that Michigan has achieved over the past five years is the direct result of the bipartisan framework that was put into place in 2008.”
Wayne Kuipers, executive director for Energy Choice Now, a group supporting deregulation, said in a statement that the governor is “rightly concerned” about high electricity rates.
“While no specific recommendations to solving this problem were laid out in his comments today, the Legislature has already taken steps to bring relief to consumers with the introduction of House Bill 5184,” Kuipers said. “On behalf of job providers and residents, we look forward to addressing the governor’s concern in the coming year by working with him and lawmakers to increase electric competition and decrease electric rates in Michigan.”
Rep. Mike Shirkey (R-Clarklake) has introduced HB 5184 , which sits in the House Energy and Technology Committee. Shirkey said the governor got the categories of the comprehensive energy policy well-identified, but said the one area where timing “needs to be re-evaluated” is in the area of electric choice.
“There’s nobody that can defend status quo as it relates to the cap on competition, and so we should not bury our heads in the sand expecting inequity to go away,” Shirkey said. “It creates winners and losers, which is anti-Republican policy.”
He said taxpayers enjoy “the worst of the system” through the state’s hybrid regulation.
“The need for adaptability is mostly due to the ineptness at the federal level, but that should not in any way prevent us from doing what we should do in Michigan with regards to competition,” he said.
Shirkey said he has been talking to Rep. Aric Nesbitt (R-Lawton), chair of the committee, and expects a “robust debate” on HB 5184 over the next year. He said he has reason to believe the chair will allow that debate early in 2014, but could not say for certain yet.
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