MICH. MOVES TO JOIN SLATE OF STATES WITH RES

The fight for a national Renewable Electricity Standard (RES) is not over. It is merely delayed until after the November 2008 election. Despite the fact that recalcitrant Senate Republicans block it, representatives for more than half of the U.S. population in nearly half the states have approved an RES for their state. The District of Columbia and Ohio are in the process of joining that list. When the measure passed by a bipartisan Michigan House committee January 23 is approved by the full Legislature, it will again affirm the wisdom of setting a definite policy requirement for a certain amount of New Energy as a method of spurring market growth.

Although Michigan Governor Jennifer Granholm favors the RES, some are against a requirement for New Energy because they fear it would drive utility bills up. Granholm and others point out that in the long run New Energy will reach price parity with current power supplies. Traditional energy sources will become more expensive as climate change initiatives force pricing to include the costs of harm done by greenhouse gas emissions while mandated levels of New Energy will drive production, scaling volume up and costs down.

Governor Granholm has been an unequivocal champion of Michigan’s job market with her proclamations that mandated New Energy production will drive economic and employment expansion. The governor and others say that New Energy manufacturing and production is a perfect replacement for Michigan’s waning auto industry. Other legislators point out that Michigan’s aging coal-burning power plants must be replaced and this is an opportunity to do it with the energy infrastructure of the future.

Michigan is one of the Top Ten for New Energy job creation potential. (click to enlarge)

AP reports this RES vote is one of the biggest facing Michigan legislators in 2008. The RES will be one of the biggest facing national legislators in 2009, after the presidential election.

Mich. House Panel Votes to Require Use of Green Energy by End of 2015
David Eggert, January 24, 2008 (AP via Yahoo Finance)

WHO
Michigan’s House of Representatives’ Energy and Technology Committee

WHAT
The committee passed an RES requiring Michigan utilities to obtain 10% of their power from New Energy by 2016 and sent it to the full House for debate. Not coincidentally, lawmakers also approved a new energy efficiency measure for the state subsidizing a changeover to new light bulbs and incentivizing utilities’ efforts to motivate consumers to save energy.

WHEN
- Michigan Democrats would like a 20% by 2020 measure.
- Governor Granholm accepts the current proposal but would add a 25% by 2025 measure as well.

What can make Michigan rich is its offshore wind potential and its workforce of mechanics and machine tool makers. (click to enlarge)

WHERE
The vote came in Michigan’s capital city, Lansing.

WHY
- One estimate has the proposed RES costing residential customers an extra $36 a year, commercial customers an extra $199 and industrial customers an extra $2,250.
- Michigan House Republicans like the RES because it represents a popular sentiment in favor of new Energy as well as a source of new jobs and economic growth.
- Senate Republicans oppose it on ideological grounds and call, instead, for tax credits on the purchase of New Energy. Their impulse is to protect the utilities.
- Democrats favor a stronger RES, calling for the utilities to obtain 20% of their power from New Energy by 2020. They point out that the legislature could underwrite short term increased power costs.

Michigan has moderate biomass resources - which means they can profit from them if there is a clear policy supporting development. (click to enlarge)

QUOTES
- Rep. Jeff Mayes, D-Bay City: "This isn't a finished product…We consider this a work in progress."
- Senate Energy Policy and Public Utilities Chairman Bruce Patterson, R-Canton: "[An RES would take] a horde of money out of ratepayers' pockets."
- House Energy and Technology Chairman Frank Accavitti Jr., D-Eastpointe, to New Energy producers: "We want to send out a clear sign that Michigan is ready for you to come here and invest your dollars…"