Energy deal in sight

Believe it or not, the Republican-dominated Legislature is giving hope to clean-energy advocates who are anxious about the direction our climate-denying president-elect could take the country on energy policy.

While Donald Trump may do his best to defund advanced energy research, attempt naively to bring back coal jobs, rubber stamp oil pipelines and dismantle the Obama administration’s Clean Power Plan, a different narrative is playing out nationally that suggests states will be the ones carrying the clean energy torch. The Michigan Legislature is proving to be an interesting case in point.

With fewer than 10 session days remaining in this year’s lame-duck session, lawmakers are close to reaching a deal on a sweeping package that extends Michigan’s clean-energy standards until 2021 — an unlikely proposition, given Republicans’ dogmatic opposition to government mandates.

Even this year, key Republicans steering energy policy stated their opposition to the Granholm-era renewable energy and efficiency standards. But clean energy has emerged as a bargaining chip, a way to gain support from Democrats as Republicans fight among themselves over the separate issue of electric choice. The two Republican-sponsored energy bills are truly bipartisan: 10 of the 11 Senate Democrats joined a majority of Republicans in passing them on Nov. 10. A similar coalition is expected as the House takes up SBs 437 and 438 over the next week. Gov. Rick Snyder supports the Senate bills.

State lawmakers have spent roughly two years crafting energy reform as the state’s 2008 renewable energy law leveled off at the end of 2015. The 10 percent renewable energy requirement has remained in place since that time. While not required by law, lawmakers saw the leveling-off as an opportunity to revisit Michigan’s energy policy.

The proposals would extend the renewable standard to 15 percent by 2021, with an interim goal of 12.5 percent by 2019. They also hold the efficiency standard — which requires utility spending on energy efficiency programs — in place through 2020. A Michigan Public Service Commission report issued on Nov. 30 showed that every dollar utilities spent on efficiency in 2015 provided $4.35 in benefits. Meanwhile, renewable energy costs continue dropping, and maintaining the standards sends a clear signal for potential investment in the state.

But clearly, 15 percent by 2021 is a floor and an easily reachable target for Michigan utilities, which have exceeded the 10 percent target. The Lansing Board of Water & Light, for example, is aiming for 40 percent clean energy by 2030, made up of more wind, solar and energy efficiency. A northern Michigan electric cooperative will soon hit 30 percent, thanks to a large wind portfolio. Minnesota, by comparison, already gets 21 percent of its energy from renewables as part of a 25 percent by 2025 mandate.

Tea party and free-market advocates like Rep. Gary Glenn, R-Midland, and the Mackinac Center for Public Policy want lawmakers to reject the “Granholm-era” clean energy mandates, even though they’ve proven to hedge against ever-increasing electric rates and bring investment to Michigan. Glenn is vice chairman of the House Energy Policy Committee and could very well become chairman next session.

Glenn’s coalition represents the opposition on another front of the debate involving changes to Michigan’s “electric choice” market.

Since 2008, state law has allowed up to 10 percent of a utility’s load to shop for cheaper electricity from alternative suppliers on the open market. School districts and businesses around the state have testified that this has saved them hundreds of thousands of dollars on electric bills.

Fearing an energy supply shortfall as coal plants close, state lawmakers have proposed changes to electric choice that, while maintaining the 10 percent cap, would create new rules and costs to maintain grid reliability for those in the program. Glenn and company say this will effectively kill electric choice through attrition, an affront to their free market beliefs and thus the source of strong infighting within the GOP caucus.

While Glenn advocates a wait-and-seewhat-Trump-will-do approach after two years, most lawmakers and the administration want this debate to end. Key to that is offering Democrats something they can support, like a higher renewable energy standard. While environmental groups — who don’t particularly focus on electric choice — say the state could certainly go higher, they also understand the political reality in Lansing. The Michigan Environmental Council, for example, supports the Senate-passed bills.

One sticking point remains, though, over provisions that could place onerous fees on ratepayers who install their own generation and sell it back to the grid, most often with solar panels. Democrats, including Rep. Sam Singh, D-East Lansing, hope the existing program is held in place as it matures in the coming years.

Throughout the process, some have rightly criticized the proposals as a giveaway to major investor-owned utilities, which have considerable sway among Lansing lawmakers and donate to nearly every single member of the Legislature. That may still be true, but the clean-energy sector would fare better under the latest proposal than it had at the outset — a hope for certainty in an otherwise uncertain energy future.