INTRO: Governor Snyder changed government fast in his first term. He cut almost $2 billion in business taxes. He’s helped Detroit get rid of $7 billion of debt. But he’s done little about energy. Experts say the state can’t wait and you don’t need to be an expert to know that earth can’t wait. It won’t wait. Michigan Now’s Chris McCarus looks at what Snyder might finally do about energy policy.
Energy policy seems obscure. We don’t pay attention until we feel a change. We like gas in our cars dropping down to$1.60 a gallon. We like warm houses in winter and cool houses in summer.
In his state of the state speech last month, Governor Rick Snyder said:
“Energy and the environment. We need a long term policy. So in March I’m going to do a special message on energy. The main pillars are affordability, reliability and environmental protection. It needs to be an adaptable policy because of the lack of federal policy and the challenges with the global market place.”
Snyder spent about one minute on this topic.
“We need to focus on important things such as eliminating energy waste, and the conversion from coal to natural gas an asset of the state of Michigan and renewables. The other part of that is that we can do better to organize ourselves.
“So I’m calling for the creation of an agency on energy that would combine the MPSC people with the energy office people, with LARA, the Michigan Department of Licensing and Regulatory Affairs, and the MEDC, the Michigan Economic Development Corporation, on how we can all work together to come up with better policies.”
The OPEC oil embargo of 1973 led William Milliken, the state’s popular moderate republican governor, to create the state energy office in 1976. Ten years later it merged with the Michigan Public Service Commission. Then it was independent again five years later, although it stayed in the same building with the MPSC. John Sarver worked at the energy office almost 30 years. Of Governor Snyder’s restructuring he says:
“It’s kind of deja vu for me,” Sarver says.
Sarver is retired from the state and one of only a handful of people in government considered to be an energy policy expert. He’s now chairman of the all volunteer Great Lakes Renewable Energy Association. He says the reshuffle might do some good. He points to the January 30 poll by the New York Times and Stanford University showing 2/3 of Americans support politicians who campaign on climate change. Sarver says politicians are out of step, including Snyder.
“The elected officials lag the general public and obviously the science. The science is being ignored. We all have to keep pushing the elected officials to take action at both the state and federal level.”
Scientists link more frequent and fierce floods, fires and hurricanes to burning fossil fuels over the last couple hundred years. Michigan’s biggest ever debate about energy ended in 2008. The state passed a renewable portfolio standard. 2015 was the target year and the standard has been reached. Consumers Energy, DTE and other utility companies have proven they can generate 10% of what they sell to customers from wind and solar power. The utilities didn’t want an RPS at all. Democratic State Representative Sam Singh of East Lansing says the state needs to not let this lesson go unlearned.
“From everything I’ve understood, not only have they exceeded that but then also the thought of how much it would cost. There was an assessment that was on all of our bills for a period of time. But they actually went early to the public service commission to remove those because it ended up making more financial sense for the utilities to invest in renewables. It helped us deal with our baseloads. And as we’re taking a look at some of what the EPA is doing on a federal level it is going to force us on a state level to react.”
Singh, environmental groups and plenty of Lansing lobbyists want to crank up the renewable standard to 20, 25 or 30%. It worked the first time, they say, it can keep going up.
Customers were paying up to $3 extra per residential customer per month. This was part of Public Act 295 of 2008. Utilities convinced the state to make customers finance a special fund to start to buy renewable energy. The utilities wanted to minimize their investment in this untested venture.
The political deal made at the time was that two- thirds of this investment would be on the backs of residential customers while commercial and industrial customers would have a free ride. Michigan is the only state to have made such a deal.
Pro renewable analysts say that wt was hard to understand the accounting at the time. Thus, the utilities benefited.
They began to build wind farms in places like Gratiot and Huron County and solar installations along I-96 near Milford. As time went on, the dirty coal-fired energy got more expensive and the renewables got cheaper.
Right now, The Michigan Public Service Commission is led by a republican from the coal industry. One of the two other commissioners appointed by former democratic Governor Jennifer Granholm will leave the MPSC in July. Snyder could name a second commissioner with a fossil fuel background. That would mean the restructured energy office and the MPSC might not bring much change. Listen for the governor’s speech in March.
