The Michigan Legislature ended its year without passing legislation that would overhaul Michigan’s energy framework. Passing energy reform was one of the early items added the Legislature’s agenda for this term, but efforts to enact these changes won’t be don’t until 2016, if at all.
The process actually began in 2013, with Governor Rick Snyder outlining a process for collecting information to inform the energy discussion, including seven public forums around the state and the publication of four reports on “Readying Michigan to Make Good Energy Decisions.” In 2014, Senate Energy and Technology Chair Mike Nofs (R-Battle Creek) began convening an energy policy workgroup to review retail open access/ energy choice, the renewable portfolio standard (RPS), and the state’s energy optimization (EO) standard, among other items. This group involved many stakeholders, including the Michigan EIBC. In early 2015, Governor Rick Snyder gave his address on Michigan’s energy future. In his address he announced that he wanted at least 40 percent of the state’s energy portfolio to be renewables and energy efficiency, provided that renewables remained cost competitive with natural gas.
Legislation was introduced in the spring of 2015. House Energy Policy Chair Aric Nesbitt (R-Lawton) introduced HB 4297 and 4298. His legislative package originally completely re-regulated the industry, eliminating energy choice, while also repealing the EO standard and letting the RPS expire at the end of 2015. In his package, all future energy planning decisions would be made through an integrated resource plan. The House Energy Policy Committee took substantial testimony on the legislation before going back to the drafting table as the Legislature headed into summer break.
In July, Senate Energy and Technology Chair Mike Nofs (R-Battle Creek) and Vice Chair John Proos (R-St. Joseph) introduced SB 437 and 438. This package maintained retail open access, but placed new requirements on energy choice providers that many believe would slowly eliminate the market. The legislation also eliminated the the RPS and EO standards for electric utilities (though the EO standard would remain for gas providers) and also made a series of changes to net energy metering that would effectively destroy the economics of the program, ending distributed solar development in Michigan. Like the Nesbitt package, future energy decisions would be made through an integrated resource plan.
Over the summer, the Senate Energy and Technology Committee took testimony on both pieces of legislation. Both Michigan EIBC and a number of our member companies testified on both SB 437 and 438, and Michigan EIBC also ran a series of web advertisements opposing SB 438. That legislation has not moved.
After making a series of revisions that would maintain retail open access at the current 10 percent with additional requirements on providers, the House Energy Policy Committee returned to their consideration of the House legislation. Late on November 5, the Committee passed HB 4297 and 4298 after adding new incentives to increase energy waste reduction, a verbal agreement to reinstate EO, and a new goal that 30 percent of Michigan’s energy comes from a mix of renewables and energy efficiency by 2030. This goal is different from a standard, in that utilities are not mandated to do this nor does the goal maintain the current requirement that at least 50% of new renewable generation be built and owned by independent project developers. That market access has allowed for more than $3 billion of economic activity related to renewable energy development since 2008 while seeing the cost of renewables decline by more than half.
As the House considered this legislation, Michigan EIBC partnered with Advanced Energy Economy and Wind on the Wires to organize another lobby day with APEX Clean Energy, Chart House Energy, EDF Renewables, Four Elements Energy, Michigan Biomass, Opower, Solar Winds Power Systems, and Ventower Industries. Members met with both Republican and Democratic House leadership, and critical members from both sides of the aisle.
It was expected that the Nesbitt package would move from the floor in December, but after the Senate expressed a desire to tackle the issue in the New Year, momentum stalled. It is now expected to remain a focus with the Legislature taking up the bill package when it returns after the holiday break. Michigan EIBC will continue to push for additional improvements to reflect the priorities of our member companies.