Senate Failure May Bring New Energy Opportunity
Governor says guaranteed fair payments for distributed green power is
Tom Karas, Michigan Energy Alternatives Project 231-590-8164
Steve Smiley, Smiley Energy Services, 231-883-4850
Ten days ago, when the Michigan Senate passed its own energy policy reform bill, SB 213, in a late-night legislative jam session just before their summer break, it was clear that the big winners were Michigan’s big utilities. Consumers Power and DTE were instrumental in making sure the Senate passed an energy bill that was a step backward for efforts to bring clean energy and energy efficiency to Michigan.
However, the failure to create meaningful energy legislation for the 21st century left the door open to a new approach for bringing Michigan out of its backwater status among clean-energy states. House Bill 5218, introduced by Rep. Kathleen Law (D-Warren), is a jobs and commerce bill that will allow individuals, school districts, public organizations, and small businesses to become independent, economically viable energy producers.
Entitled the Renewable Energy Sources Act, HB 5218 would require that electric utilities purchase—and pay a fair price for—electricity generated by anyone in the state who uses an approved clean-energy generating system. It has earned the support of Michigan Governor Jennifer M. Granholm, who endorsed Rep. Law’s proposal in a speech at the Great Lakes Renewable Energy Fair in late June.
The representative is pushing her proposal as a robust jobs-builder.
“The Renewable Energy Sources Act will offer the largest jobs and commerce boost this state has seen since the Model T,” Rep. Law said.
The bill would require the Michigan Public Services Commission to establish buyback rates that guarantee renewable energy investors a guaranteed long term income from their investment in green electrical generation equipment. That income guarantee would facilitate favorable financing terms for renewable energy systems—from large-scale wind farms to backyard solar panels.
“The language of Ms. Law’s bill has already been studied in other states for inclusion in existing energy legislation,” according to Steve Smiley, a noted authority on wind power and other green generation technologies. Mr. Smiley, who helped build the state’s first utility-scale wind turbines, added that similar legislation is already before Congress, where, he said, Rep. Jay Inslee (D-Washington) introduced legislation on June 26.
“Michigan has a second chance to create a vibrant new economy by adapting HB 5218,” Mr. Smiley concluded.
HB 5218 does not involve tax breaks or government subsidies; rather, it establishes a market-based business model that increases economic activity and employment by offering strong incentives for investment in renewable energy generation. Each clean energy technology will be earn a fair price, based on its cost, to build a market for it. The program would encourage a healthy mix of green generation technologies, deployed in many locations, that would build a sustainable clean energy model that Michigan could use to build a 21st-century economy.
Tom Karas of the Michigan Energy Alternatives Project sees HB 5218 as a counterbalance to the bill recently passed by the Michigan Senate.
“SB 213 was a huge gift to our big utilities,” Mr. Karas said. “It eliminated customer choice in order to guarantee those companies enough income to pay for big, new, increasingly expensive coal plants that would provide expensive energy that the state does not need. The bill also did almost nothing to encourage the development of green power sources.”
“HB 5218, in contrast, offers Michigan’s small business community a fresh opportunity to get in on the proven benefits of clean energy production as a path to economic prosperity,” he said.
HB 5218 offers different purchase rates for different electricity generating systems as a way to build a mix of renewable energy manufacturers and installation technicians in the state. The prototype of the program has its roots in Germany, where a similar law stimulated tremendous growth in renewable energy production. The Germans for example, have captured 50 percent of the world’s solar electric market, in a cloudy country, with this policy. One German state with half the population of Michigan was using wind power to provide 25 percent of its electrical demand within five years of adopting the program.
Ontario, Canada, also saw an overwhelming response from small-scale energy investors when that province launched its own trial program.
The larger question, according to Mr. Smiley and Mr. Karas, is not whether the program would work. Rather, they say, it is whether Michigan politicians can resist the state’s big utilities, which, so far, have defeated all attempts by progressive Michigan legislators to reform the state’s electric utility laws and foster more jobs-rich green energy and energy efficiency investments.
Many observers feel that if the Granholm Administration is to have a meaningful legacy after six years in office, it may well hinge on its success with energy legislation. Enacting new laws that keep energy costs low, stimulate significant job growth by encouraging sizeable investments in clean energy and energy efficiency, and cut the emissions that are warming Michigan’s winters and lowering Great Lakes levels would be an historic accomplishment.
That, they say, would secure a positive page in Michigan history for Michigan Governor Jennifer M. Granholm.
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