LANSING – The Michigan
Environmental Council and the Natural Resources Defense Council were among
numerous environmental interests who said Wednesday that, despite great
conversations during the 37-member work group, the Senate’s renewable energy
portion of its energy policy proposal still falls short of expanding the use of
renewable forms of energy.
On top of that, solar
power-owning homeowners blasted SB 438as “anti-capitalism, anti-American,
anti-technology,” as one citizen from West Olive described in his
testimony before the Senate Energy and Technology Committee Wednesday.
The committee did adopt
an S-1 substitute to the bill, though
Chair Sen. Mike Nofs(R-Battle Creek) does
not expect even that version of the bill will be the final version as more
amendments and changes are already expected on technical issues, much less
policy issues.
By and large, the bill
repeals current provisions requiring utilities to generate 10 percent of their
energy from renewable sources, as well as replaces all those references of
“renewable” energy instead to “clean” energy. Clean energy
is defined as electricity generated using a clean energy resource, which is
then defined as an electric generation technology that “meets all current
state and federal air emissions regulations or qualifies under the U.S.
Environmental Protection Agency regulations as being carbon neutral.” It
goes on to say that such resources could include, but are not limited to, a
fossil fuel generation technology in which at least 85 percent of the carbon
dioxide emissions are captured and permanently sequestered or used for other
commercial or industrial purposes not resulting in the release of carbon
dioxide into the atmosphere.
“We don’t agree
that’s clean enough,” said Sarah Mullkoff, energy program director for the
Michigan Environmental Council. “We don’t think the concept of a clean
energy standard adds sufficient value to the discussion, and (it) doesn’t
adequately recognize importance of mitigating risk. … It doesn’t consider
demand-side resources such as energy efficiency or load-side management.”
And it certainly doesn’t consider the public health impacts of carbon
emissions, she said.
SB 438 also refers to
“energy waste reduction” instead of “energy efficiency” or
“energy optimization” throughout the act, as well as revises the
amount of incentive a rate-regulated provider may obtain by exceeding the
energy waste reduction standard.
The MEC was not fond of
the elimination of “energy efficiency,” especially when Governor Rick Snyder and others have
suggested Michigan is capable of raising its goal in that arena. The group also
had concerns about a 2 percent spending cap associated with energy waste
reduction.
Mullkoff was joined in her
concerns by Ariana Gonzalez, an energy policy analyst for the Natural Resources
Defense Council’s Midwest policy office.
“If (Michigan’s)
future is to be clean, affordable and reliable, I fear this bill falls
short,” Gonzalez said, adding that the energy efficiency standards should
be increased between 1.5 and 2 percent.
She too suggested the
legislators eliminate the spending cap related to energy optimization, noting
that even Consumers Energy recently requested permission to could go beyond the
cap themselves.
Gonzalez also took issue
with removing renewable energy from the bill and especially taking out a
specific mandate. As written, there is no specific mandate attached to clean
energy, and Sen. David Knezek (D-Dearborn
Heights) said he does not expect that one will find its way in there before the
bill heads to Governor Rick Snyder.
“It seems like
they’re pretty dead-set against having any kind of mandate. At that point, I
want to make sure we’re doing everything we can to protect this industry and
try to advance it here in Michigan because we see the tangible benefits
consumers are able to realize,” Knezek said after the meeting, referring
to industries that produce wind, solar or other forms of renewable energy.
NET METERING:The bill also replaces a net metering
program, which allows electric customers to develop on-site renewable energy
electric generation projects to meet some or all of their electric energy
needs, with a distributed generation program under which an electric customer
could generate up to 110 percent of the customer’s average annual electricity
consumption.
The Public Service
Commission recently released a report showing net metering has been growing in
Michigan and even increased 25 percent over one year (See Gongwer Michigan Report, August 4, 2015),
though critics dismissed this claim because that report indicates only about
1,800 people are involved in such a program.
Still, eliminating the
program got ordinary citizens – who had already invested tens of thousands of
their own money into such projects – and solar power interests especially
heated in committee.
“Net metering is a
benefit to all ratepayers on the grid,” said Amy Heart, senior manager of
public policy at a solar company called Sunrun and spokesperson for The Alliance
for Solar Choice. “To basically kill a growing industry … is too much of
a risk at this time and not necessary.”
Instead, the group
suggested consideration of minimum billing, which would charge all ratepayers a
minimum fee for using the grid, even if that individual generates his or her
own electricity through renewable resources, because that would ensure utility
companies can still have revenue available to maintain, update and operate the
grid, especially during peak times.
Nofs said the idea of a
minimum charge had been floated during the work group but then dismissed
because there are not the available resources to say exactly what that rate
might be.
“The utilities will
tell us it could be somewhere in the $30-$40 range, where the gentleman today
speaking said it was $5-$10,” Nofs said, referring to a representative
with a company called SolarCity. “So it’s hard to determine that right
now. We don’t have that expertise.”
Knezek supported the
growth of the solar industry, noting that they are high-paying, safe jobs that
grow the economy.
“I think net
metering or solar production in general, we have a tremendous opportunity to
create quality jobs here in the state of Michigan, and I think that should be
at the forefront of all of our discussions,” he said after the meeting.
But the testimony of
particularly SolarCity and another firm were ripped by Citizens for Michigan’s
Energy Future, which primarily represents DTE Energy and Consumers Energy. The
group said The Alliance for Solar Choice is based in California and its sister
group, Tell Utilities Solar won’t be Killed in Arizona.
“The fact is, these
out-of-state special interest groups are all about protecting the sweetheart
subsidies for their out-of-state business’ profits that unfairly cost the rest
of Michigan ratepayers,” said Kelly Rossman-McKinney, spokesperson for
Citizens for Michigan’s Energy Future.
But the revision of the
net metering program was also criticized by Allen O’Shea, president of CBS
Solar near Traverse City. Mr. O’Shea said he had invested more than $1 million
into his company to bring solar to Michigan and reduce its costs by using
Michigan-made products for Michigan-based companies. His company has built 1.8
megawatts worth of solar in Michigan, he said.
“My concerns about
Senate Bill 438 is that it will just pretty much gut net metering. It will not
allow us to continue to grow as a company. We will probably have to look for a
lot of our business out of the state of Michigan rather than within the
state,” he said. “If it’s not broken, don’t try to fix it. If people
could invest in components that were not their own meter things could really
change in the economy.”
Representatives from
both DTE Energy and Consumers Energy said grandfathering in those who have
invested in rooftop solar already from rate changes that could come from
revisions in SB 438 is something worth discussion.
But, “We oppose
cost-shifting from one set of customers to another set of customers, whether
that’s retail open access or on the solar issue,” said Consumers
spokesperson Dan Bishop. “In this case, this is a situation where these
are people that are getting paid a retail rate for electricity versus
wholesale. So in our mind, it’s a cost-shift. It really is not appropriate. We
think that subsidy is not a good idea regardless of what we’re talking
about.”
And Dave Harwood, director
of renewable energy for DTE, agreed.
“What’s important
to us is that the net cost to our customers, to our broad base of customers,
doesn’t go up,” Harwood said. “Whatever costs the utility saves as a
result of solar generation, for example, distributed solar generation on
someone’s home that we would save in serving the grid or all of our customers,
is that that’s what it’s worth.”
And both companies have
programs for their customers to essentially buy shares of a utility-scale solar
project, Solar Gardens for Consumers and Solar Currents for DTE.
“We think there’s
customer demand out there for additional solar, but we can bring the economics
of a large system into play for customers that can’t afford to put it on their
home or don’t have a home that faces the right direction to get the sun, or doesn’t
own a home at all,” Harwood said. “This would allow them to get into
a program where they could subscribe to a large, economic-size system somewhere
on the grid where we would figure out where’s the best grid benefits and
located in a place where it makes sense, and then sell subscriptions to
customers off of that.”
Nofs said he expects to
have another hearing on SB 437and SB 438 next week, likely on Wednesday
if there is no session but possibly at its regularly scheduled time on Thursday
if there is session or a road funding agreement is reached.
This story was published by Gongwer News Service. To
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