Following eleventh-hour negotiations on Thursday, Michigan legislators approved a comprehensive energy reform package, which, among other actions, will expand the state’s renewable portfolio standard (RPS) and preserve retail net energy metering (NEM). Gov. Rick Snyder, who helped broker the deal, is expected to sign the legislation into law.
The energy reform package has been two years in the making, and clean energy advocates have praised approval of the final bills, S.B.437 and S.B.438. The legislation will increase Michigan’s 10% RPS mandate, which was achieved by the end of 2015, to 15% by the end of 2021. National business group Advanced Energy Economy (AEE) says Michigan’s previous 10% RPS led to the development of over 1.6 GW of renewable energy capacity and attracted nearly $3 billion in renewable energy investments to the state since 2008.
According to J.R. Tolbert, AEE’s vice president for state policy, the legislation “reaffirms to the advanced energy industry and their customers that Michigan is open for business.”
Tolbert continues, “By increasing Michigan’s RPS to 15 percent of annual retail electricity sales, the state has the potential to attract an additional $2.5 billion to 4.3 billion in renewable energy investment by 2021.”
Chris Kolb, president of the Michigan Environmental Council, comments, “These bills are a vast improvement over earlier proposals and will keep Michigan’s energy policy moving in the right direction.”
Notably, the legislation also includes provisions related to energy efficiency, and Kolb says, “This deal will save millions of dollars a year for Michigan residents by continuing to eliminate energy waste and increasing investments in wind and solar power, which are the cheapest ways to produce electricity.”
In a statement, Gov. Snyder says, “The bills protect our environment by making it easier for Michigan to develop its own energy sources, instead of buying coal from various states. Our energy will be more affordable, more reliable and more green. This achievement continues sending the message that Michigan has a very bright future.”
However, AEE’s Tolbert admits the legislation is not perfect.
“While the increased RPS represents significant progress, the Michigan House missed an opportunity to solidify the state’s commitment to advanced energy resources by omitting a provision that would have ensured a 50-50 ownership split of future renewable energy projects in Michigan,” says Tolbert. “Such a requirement allows independent developers to build 50 percent of new renewable projects in Michigan, which would have driven down ratepayer electricity costs by injecting greater competition for renewable energy in Michigan’s market.”
The Alliance for Solar Choice (TASC) points out that the final legislation doesn’t include previous proposals to eliminate retail NEM.
Amy Heart, spokesperson for TASC, says, “We were encouraged to see elected officials from both sides of the aisle work to improve the bill over the past two years in an effort to protect a consumer’s ability to generate their own electricity with solar. Legislative leaders heard loud and clear that retail net metering must be maintained to ensure a level playing field for self-generation in Michigan.”
Another solar victory is that the legislation will not implement a new grid charge – for now. Rather, it directs the Michigan Public Service Commission to begin a distributed generation tariff process and, according to a bill summary, “establish a nondiscriminatory, fair, and equitable grid charge to apply to customers who participated in a net metering or distributed generation program after the bill’s effective date.”
Heart says, “We still have serious concerns over how the distributed generation tariffs will be calculated based on the language in the bill. It will be critical for the commission to take into account the benefits that individual investments in rooftop solar and other distributed resources provide, such as increasing energy security and reliability and reducing other utility spending. It’s now up to elected officials to help guarantee a fair, equitable process – and we look forward to working with Governor Synder and legislative leaders to ensure no discriminatory charges will be levied on solar customers going forward in order to protect Michigan’s solar jobs, spur local innovation, and lower energy bills across the state.”