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Will EPA carbon rules push Michigan harder on clean energy?

A policymaking storm is brewing in Michigan as state officials and lawmakers simultaneously devise a plan to comply with proposed federal carbon rules and also revisit the state’s Renewable Portfolio Standard that expires next year.

It appears regulatory officials and lawmakers are attacking the two issues separately — the Department of Environmental Quality recently appointed an official to lead the process of complying with President Obama’s rules; meanwhile, the chairman of the Senate Energy and Technology Committee has a task force studying a new RPS.

Somewhere in the middle will likely be a debate over ramping up renewable energy production and considering other non-renewable power sources to lower emissions. Michigan may have the added benefit of tackling the two issues at the same time, as each process could inform the other.

But while renewable energy advocates may be hopeful that the emissions rules will prompt a more aggressive RPS (Michigan is on pace to meet its 10 percent goal by 2015), the Republican energy committee chairmen from both chambers are expressing interest in redefining “renewable” in order to hit emission reduction goals.

‘You don’t know the future’

State Sen. Mike Nofs, a Republican from the state’s 19th District southwest of Lansing, says he’s even entertaining taking a renewable percentage off the table, instead meeting emissions targets with newly defined “clean energy” sources, which he says includes natural gas. Doing so would mean amending Public Act 295 of 2008, which defines the state’s RPS.

“What I’m looking at is expanding and allowing” PA 295 to include more forms of energy, “because you don’t know the future,” Nofs said. “Instead of ‘renewable,’ it’d be ‘clean.’ … You don’t have to have an RPS, you could just have a clean energy standard that would qualify.”

An amended law, he said, might just regulate emissions, rather than require renewables.

“We’re going to put that out there,” Nofs said, when asked whether a new RPS percentage may be eliminated entirely. “We have a lot of experts in the room. I’d like to flesh that out. … Everyone is fixed on a number. I’m trying to get off that.”

State Rep. Jeff Irwin, a southeast Michigan Democrat, said Nofs’ proposal “would be a devastating blow to development of bonafide renewables.”

When asked about possible objections to his ideas, Nofs said, “Oh yea, I’m expecting it, believe me. I think that’s good.”

Meeting regulations with renewables

Meanwhile, preliminary results from the University of Michigan’s Energy Institute — where researchers are studying how the state can increase renewables to comply with federal rules — show what kind of commitment it might take.

“Given that the EPA’s proposed rules for reducing CO2 from existing power plants could be met by increasing renewable generation, a more ambitious RPS could fulfill much of Michigan’s obligations for emissions reductions,” University of Michigan researcher Jeremiah Johnson writes for the institute.

Preliminary results Johnson shared in an interview with Midwest Energy News show a 25 percent RPS by 2025 would reduce carbon dioxide emissions by 15 percent. A more ambitious 40 percent in that timeframe means a 28 percent reduction.

Michigan’s target cut under proposed EPA rules is 36 percent by 2030. Johnson said a final report will be published in August.

As one of four pillars by which states can meet the emissions standards, “The renewable energy portion is one that could certainly meet a lot of that need,” Johnson said.

“An expanded RPS could meet some or all of emissions reductions goals. I think there’s still a lot of untapped renewable energy potential. … There certainly will be some portion of meeting the regulations that’s most cost effective with renewables. The question is how much.”

In other words, the more ambitious a revised RPS, the easier it would be for the state to comply with CO2 rules.

Mark Schauer, the 2014 Democratic gubernatorial candidate, said in an email recently he’d like to raise the RPS to 30 percent by 2035.

“This will create thousands of good manufacturing and construction jobs, and reduce our dependence on foreign oil,” he wrote.

Gov. Rick Snyder, whose office did not respond to requests for comment, has said that based on studies done by the Michigan Public Service Commission and the Michigan Energy Office that the state could get an increased share of its energy from renewable sources by 2025. His Energy Task Force found that the state could meet “RPS targets of as much as 30 percent (or perhaps even higher) from resources located within the state.”

Findings from the task force last year came after a failed 2012 ballot initiative that would have amended the state constitution to require 25 percent by 2025.

‘A challenge to overcome’

David Holtz, chairman of the Michigan chapter of the Sierra Club, said recently that “it’s good politics to have a substantial reduction in CO2 emissions.” The RPS, he added, “needs to be updated or we will fall behind.”

Holtz referred to starting with broad goals of “keeping fossil fuels in the ground,” which obviously conflicts with Nofs’ vision.

“We’re at a point where we’d love to see all fossil fuels int he ground. One hundred percent reliable, renewable over the next 20 to 30 years.” For now, though, he said the organization isn’t quite at a number.

“But one thing this EPA rule does is it begins focusing attention on specifics” for a new RPS, he said. “It’s a tremendous impetus to specifics.”

Nofs’ ideas may bring to mind for groups like the Sierra Club the recent freeze of renewable standards in Ohio. While Holtz acknowledges “there is certainly a base within a part of the Legislature that would support taking us back,” he’s confident that Michigan has a “strong base of support” for renewable energy in the manufacturing sector, fueled by the state’s decline in auto manufacturing: “There is now a constituency within the business community for clean energy.”

Irwin said a “number isn’t the only thing I’m looking at. I just want to make sure we do everything we can to promote renewables and clean energy development in Michigan.”

Irwin is part of a group of legislators focused on small-scale renewable development that can be done on a residential level.

“The real benefit to Michigan’s future is a sort of distributed, small-scale generation that makes us more economically and otherwise secure,” he said. But renewables, in comparison to natural gas, have much less price volatility. “I’m of the mind that renewables have this tremendous benefit of locking in a price right now that stays constant.”

But, given findings like Johnson’s, Irwin agrees that the new federal rules “punctuate the need for a greater RPS. What we’re up against is many of the decision makers just fundamentally are not on board with this idea that burning fossil fuels and emitting carbon dioxide is a problem. That’s an issue that’s a challenge to overcome.”

5 thoughts on “Will EPA carbon rules push Michigan harder on clean energy?

  1. This article unintentionally makes the case that none of the decision makers or election hopefuls have a firm grasp of what is at stake for Michigan’s economy WRT energy policy. While Rep. Nofs recognizes that the term “renewables” doesn’t measure or price any “bonafide” environmental, energy security or ratepayer benefits, he fails to mention the desperate need for Michigan businesses to keep manufacturing costs as low as possible. Mandating ANY new sources of electricity AT ALL automatically drives rates higher unnecessarily because very few if any of Michigan’s existing power plants have any technical or economic reason to be shuttered or decommissioned and the fleet is already underutilized compared with optimum levels. Only when an electricity shortage is imminent (and it isn’t) does it make sense to build the next new power plant (renewable, inexhaustible, cleaner than an operating room or anything else). From a ratepayer perspective (which happens to also be a manufacturing job-provider perspective), mandatory replacement of things that are still dependable and lower cost than unneeded new things is a bad idea. Michigan would do well by its economy to fight the Obama executive order and EPA implementation of GHG reduction targets to the bitter end.

    Then of course we have Mr. Schauer making goofy, uneducated remarks about “energy independence” at a time when the US has never been more electricity fuel independent. (Over 95% of all electricity fuels are domestically sourced).

    Holtz makes it clear his completely misguided Sierra Club organization is trying to publicize the myth that we are “running out of energy sources” at a time when known reserves of coal, natural gas, uranium and thorium have never been higher. In fact we have enough partially consumed uranium on site at our nuclear power plants to run the country’s entire electricity system for more than 100 years… worth an astonishing $100 Trillion in equivalent BTU value of coal or NG. Unbelievably, some at the federal government level want to re-bury this resource, which has already been mined and considerably refined, forever.

    Unfortunately, aptitude for physics, natural resources data assimilation and high level energy systems knowledge has never been a strong campaign platform for those seeking elected office. If it were, electricity would be far less expensive and cleaner, and environmental groups would have long ago lost their honey pot of donations driven by their uninformed and detrimental energy policy platforms.

  2. Not one mention of efficiency gains to meet the EPA rules. We need a balanced approach and efficiency is MUCH more cost effective per ton of GHG reduced.

    RPS is a tool to meet a goal – lowering GHG. Sounds like some folks see RPS as the goal – not a tool.

    Also, candidate Schauer shows his energy ignorance – RPS does not reduce foreign oil silly.

  3. Energy Efficiency is also only a fuel saver (worth between $10 to $25 per MWh) until there is a capacity shortage. Average and peak load have both been declining since 2007 in PJM and I suspect in most other regions. Power plants retirements other than EPA forced have been negligible. If low-cost electricity is a national economic imperative (and it should be), then ratepayer borne EE spending ought to be indexed to expected capacity shortage and strongly weighted toward peak demand reduction. Otherwise costs can easily eclipse savings.

  4. The argument that EE is only a fuel saver was flushed away in the 1980’s, with the advent of IRP. This “fuel savings only” argument was used by utilities and EE opponents to try to avoid EE requirements. The whole point of EE as a resource is that by ramping up EE now you defer or avoid the need for additional generation down the road. If you wait until you “need capacity”, it’s too late. Convenient ‘catch 22’.