LANSING – Sen.
Mike Nofs hopes to introduce his energy proposal after the Legislature
works its way through the budget this week, and among the provisions will be a
clean energy goal linked directly to the to-be-determined national carbon
emissions standards.
“You have to be certified or
licensed to operate under all of the national air quality standards in place,
and once the (federal) plan goes in place, we’ll have an additional threshold
for carbon, which will be equal to the emissions from a combined cycle natural
gas plant,” Greg Moore, Nofs’ (R-Battle Creek) legislative director and
energy policy advisor, said.
The goal differs, of course, from
the current renewable energy standard for utilities to generate 10 percent of
their energy through renewable resources by 2015, but most interests in and
around the energy debate in Lansing seem to be leaning toward a term like “clean energy” instead because it’s more flexible by definition.
The federal government has pushed
back when it will release its carbon emission rules that some say are to blame
for a potential loss in capacity for Michigan (and elsewhere). Nofs said the
latest he has heard for the assignment of those rules is August. States will
then have roughly a year to put together compliance plans and submit them to
the U.S. Environmental Protection Agency.
Under Nofs’ anticipated legislation,
energy providers will have through 2030 to meet those standards, Moore
said, so as to prevent a massive buildup of generation that is ultimately
passed on to ratepayers.
No specific standard is expected, Moore
said. Instead, providers will have to follow an integrated resource planning
approach, which usually involves evaluation of supply- and demand-side
investments.
That follows with Governor
Rick Snyder‘s emphasis on energy efficiency in his discussions about a new
energy policy.
Nofs, in an interview with Gongwer
News Service on Friday, noted several ways of managing an integrated resource
plan. Among them is reviewing the state’s use of smart meters, which contribute
to energy efficiency since customers can see when they use the most electricity
and the subsequent costs attached to that. The end-goal, Nofs said, is for
utilities to be actively engaged with the state in an effort to educate
residents about how to better manage their electricity usage. And the utilities
could offer discounts to those who are using energy during non-peak hours,
making a win-win for utilities and customers alike.
Nofs said he doesn’t expect to
mandate this, but will look to Snyder’s new Michigan Agency for Energy to lead
on the matter.
“They’re going to be doing the
educating and working with utilities,” he said of the agency. “And
the utilities understand the cheapest energy we use is what we’re not
using.”
Another incentive Nofs expects to
include in legislation is reforming purchase power agreements so that regulated
utilities will look first at buying existing generation from private companies
before spending time and money on building a new power plant, for instance. Nofs
said utilities currently have no incentive to enter into a purchase power
agreement with private businesses because they tend to not make money off the
deal. So instead, they build new generation, which is then passed on to
ratepayers.
“Right now, utilities don’t get
a rate of return (on purchase power agreements). We’re going to give them a
rate of return through the Public Service Commission,” Nofs said. “So
they’ll be able to make a little bit of money. We’ll incentivize them to go out
and do that.”
The other problem with purchase power
agreements currently, Nofs said, is they look like a negative on a company’s
balance sheet. So if they are able to get a rate of return on an agreement,
that will not only help the power company but also help private businesses that
might be able to offer a program or energy, he said.
ENERGY CHOICE: Nofs has previously made his position clear on the state’s
laws surrounding electric choice and the reserve of 10 percent of the market
for alternative energy suppliers: he will keep it as it is, but with some
parameters.
In April, he revealed some of those
parameters, which include requiring small load or small capacity customers to
ask a utility if they can come back from an alternative energy supplier, and if
the utility does not project enough capacity to meet those needs, the customer
will have to wait. The process would be similar for a large capacity customer
except that a utility can allow them back without necessarily having the
capacity available for them so long as the two parties reach an agreement on
how to get there.
The allocation is a stark contrast
from a plan by his counterpart in the House, Rep.
Aric Nesbitt (R-Lawton), who seeks to eliminate the choice provision
altogether.
This story was published in Gongwer News Service. To
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