The state’s draft report on renewable energy notes that about 200 companies in Michigan are now part of the clean energy industry. (Photo: Union of Concerned Scientists)

Gov. Rick Snyder’s administration is earning high marks for its draft report on the possibilities for renewable energy in Michigan.

Released last month, the draft says the state could triple its renewables from the current, mandated 10 percent to at least 30 percent by 2035 without straining electric grids or ratepayers’ wallets.

But now, some clean energy advocates and entrepreneurs, who strongly praised the report’s conclusions and the unusually open, public process Snyder’s administration used producing it, are submitting comments before a Oct. 16 deadline asserting that its findings, while correct, are too conservative.

Meanwhile, several citizen groups are planning to use rules based on the current renewables mandate to push the state’s largest utilities to accelerate their renewables development now, rather than waiting for the governor to propose new legislation in December based on his yearlong initiative, “Readying Michigan to Make Good Energy Decisions.”

The Michigan Public Service Commission and the Michigan Energy Office, which are managing the project, will publish a final renewables report on Nov. 4.

Widening a Window of Opportunity

Advocates say Michigan could develop significantly more than 30 percent renewables, do so more quickly than the report suggests, and still avoid technical problems and significant rate increases.

Among them is Doug Jester, a former East Lansing mayor and veteran of several Michigan utility regulatory and economic development agencies who is now a principal at 5 Lakes Energy, a pro-business policy consulting group.

“All of the scenarios in the draft assume that the state increases its renewables supply by 1 percent per year,” said Jester, who was skeptical of Snyder’s process until he saw how transparent and well managed it was. “But we’ve actually been adding them at 1½ percent per year to meet the current mandate, without problems. So I’m submitting comments asking that they include an analysis of the effect of using a faster pace.”

Snyder’s energy policy initiative, which also deals with efficiency, utility competition, and “additional topics,” used seven forums and a website to gather public comments on 114 mostly technical questions about how energy is generated, priced, distributed, and used in Michigan.

Clean energy advocates and entrepreneurs flocked to the well-attended forums and spoke passionately about the need for more clean power. Many submitted studies recounting other states’ success renewable energy mandates more demanding than Michigan’s “10 percent by 2015” requirement.

Dan Scripps, a former state representative now heading the Michigan-based Energy Innovation Business Council, attended six forums, spoke at two, and submitted a number of formal studies. He, too, praised Snyder’s approach, the draft report’s findings, and the level of public participation.

“Marquette had a blizzard the day of their forum, but the room was still full,” recalled Scripps. “They showed a pretty broad interest in clean energy among people in Michigan, and a desire to get things right. Most comments seemed to say that we, as a state, can do better.”

He also said utilities could do more, and do it more quickly, than the draft suggests.

“The headlines from the draft report was that getting to 30 percent by 2035 was feasible, but we believe that understates the case,” he added. “We’ll be submitting additional comments supportive of the findings, but adding that we could add more than 1 percent a year and stay within the current cost caps, maintain reliability, and provide greater job growth.”

Will Utilities Do More?

The state’s two largest electric utilities, DTE Energy and Consumers Energy, reacted differently to the draft.

Consumers did not issue a press statement and said it wouldn’t submit formal comments.

DTE spokesman Scott Simons said his company is still studying the draft, rates it “a strong start,” and would file a comment.

“They did a good job assimilating a lot of feedback,” Simons said. “We do support the process of gathering facts before starting policy discussions. We’d like to see some flexibility and balance incorporated into any long-term plans, and as far as a larger renewables mandate, it shouldn’t be an arbitrary number. It should be based on current technology and cost.”

However, several citizen groups are using the mandate law, Public Act 295, to push both companies to deploy more renewables more quickly. Both DTE and Consumers have said they don’t want to discuss new plans for renewables until the current mandate expires late next year.

That is prompting the Michigan Environmental Council, Environmental Law & Policy Center, and Ecology Center to intervene in MPSC proceedings required by PA 295 that evaluate both utilities’ renewable development.

Also, MEC, Sierra Club, and the Natural Resource Defense Council are evaluating the ability of increased energy efficiency and renewables, combined with existing gas-fired power plants, to displace some or all of the need for Consumers’ proposed, new 700-megawatt gas plant. The project, already approved by the Department of Environmental Quality, must receive a “certificate of need,” required by PA 295, before it can be built.

A Draft of Good News

The draft doesn’t reflect the many passionate, non-technical comments made by several hundred pro-renewables citizens who, along with efficiency advocates, dominated the Snyder forums, but it does evaluate dozens of formal studies submitted by experts on—and both promoters and opponents of—renewable energy.

“The report is an honest take on facts and analyses presented to them,” said Jester, who read every document posted at the site, “and it doesn’t seemed to be skewed by public opinion. They obviously looked through all of the comments and rejected the material that was not credible.”

Released on Sept. 20 by MPSC and the Energy Office, the draft makes many positive points:

º Utilities are meeting the mandate without technical problems—and far more cheaply than some predicted.

º Management of the interstate electric grid by the Midcontinent Independent System Operator (MISO) and sharply falling wind power costs mean a 30 percent mandate wouldn’t stress the transmission grid or ratepayers’ wallets.

º Only one of the state’s 84 private, public, alternative, or member-owned power companies won’t make its mandate, and utilities are almost done adding 1,400 megawatts of renewable energy, most of it from wind, to their power supply—on a windy day, roughly equal to two coal- or gas-fired power plants.

º Michigan’s wind prices have dropped 50 percent, from just over 10 cents per kilowatt-hour in 2009 to between 5 and 6 cents, thanks to windier-than-expected conditions and improvements allowing taller towers and lighter turbine blades.

º Michigan’s wind power is now cheaper than the national average and about the same price as power from a new natural gas plant. It offers locked-in prices that hedge again natural gas prices already rising from historic lows.

º DTE’s and Consumers’ renewables development generated 2,500 mostly temporary construction jobs.

º Property tax receipts are rising in communities hosting wind farms, helping local governments, schools, and services; and property owners hosting turbines are receiving significant royalty payments.

º Wind and solar manufactures now number around 200 within Michigan.

º It is untrue that wind and solar don’t cut pollution and are actually very expensive because utilities must always run coal or gas plants to fully back them up due to their variability. They require no more back-up than conventional generation and, once completed, will displace 4 to 5 million tons of climate-changing greenhouse gases annually.

º Studies submitted by MISO, DTE Energy, Consumers, and the Michigan Electric and Gas Association reject claims that renewables destabilize the grid and drive up costs. In fact, MISO’s bidding process allows wind to substantially cut overall wholesale power prices in many situations.

EIBC’s Scripps said he also plans to ask the commission and energy office to say more in its finalized report about some of the claims anti-wind activists submitted about wind power’s effects on public health and property values.

“There’s a large body of research that can find no correlation between wind power development and either health problems or falling property values,” he said. “When you talk to people in areas with wind turbines, the majority are supportive. It’s great economics; they see property values going up and the improved quality of their power supply.

“It’s like in Gratiot County [with Michigan’s most extensive wind power development], where people are talking about bringing in a computing center because their electricity supply is now much more stable,” he said.

Allan O’Shea, owner of Contractors Building Supply in Mesick, Mich., and a veteran residential solar and wind power installer, says he’s feeling better these days about the state’s clean energy future.

“As I read the report as a business person, I’m sensing we may be approaching a tipping point. There’s been a change; renewables are gaining weight,” he said.

Jim Dulzo is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at jimdulzo@mlui.org.