Commentary: Looking forward, and backward, in Michigan

Skip Pruss is a principal and co-founder of 5 Lakes Energy LLC in Lansing.

Skip Pruss is a principal and co-founder of 5 Lakes Energy LLC in Lansing.

By Skip Pruss

2015 will be a watershed year for energy policy in Michigan – and few states will be watched as carefully by energy policy experts and interested observers.

The expiration of Michigan’s “10 x 2015” renewable energy mandate is framed by accelerating changes in energy markets, new federal regulatory requirements, the proliferation of disruptive new technologies and energy services, and antiquated regulatory paradigms.

Michigan is poised to do something “big” on energy, with diverse stakeholder interests having dramatically different ideas, goals and expectations for Michigan’s energy policy.

First the positives:

No one can accuse the Snyder administration of not being careful and deliberate in setting the stage. The administration brought in an immensely capable energy advisor, Valerie Brader, and appointed a new highly-regarded Public Service Commissioner, Sally Talberg.

The Governor set the framework for future energy policy calling for an energy plan that would be adaptable, reliable, affordable and protective of the environment. It launched a series of well-planned informational energy “listening sessions” co-chaired by the MPSC Chair, John Quackenbush and respected State Energy Office Director, Steve Bakkal, who solicited and responded to copious public comment.  MPSC staff contributed research, analyses and expertise, culminating in the issuance of four very thorough and well documented reports.

Meanwhile, Sen. Mike Nofs is chairing a large and diverse stakeholder effort with the end goal of crafting a flexible, consensus-based energy policy platform. Nofs may be the most knowledgeable legislator on energy issues, having navigated Michigan’s 2008 energy package to a safe landing.

The policy formation process has also been aided or derailed – depending on one’s perspective – by EPA’s Clean Power Plan – requiring overall reductions in carbon dioxide emissions from existing fossil fuel plants. Significantly, the administration has responded cautiously to EPA’s regulatory thrust, reserving judgment publicly but articulating its most pointed concerns in its comments submitted to EPA.

But there are negatives as well.

There is still a palpable and systemic aversion to embracing innovation in energy policy.  Despite numerous signals that an energy transformation is underway and disruptive change to the power system has arrived, innovation and ingenuity in the energy sector are being actively resisted and even repressed.

Myths regarding the cost, effectiveness, and adequacy of renewable energy and energy efficiency persist, despite having been thoroughly debunked by virtually every authoritative source including the MPSC. Cost and benefit analysis that should be embraced is eschewed. Integrated resource planning – the collaborative process used in 38 states by which energy options are identified, measured and assessed – is almost entirely nonexistent in Michigan. Long-term considerations of energy risk factors like emerging energy technologies, changing economics, future regulatory constraints and climate considerations are being largely ignored.

Backwards or forward?

“If the rate of change on the outside is greater than the rate of change on the inside, the end is near.” — Jack Welch, former CEO, General Electric

In leading states, energy policy is evolving much faster in recognition that energy policy innovation must keep pace with technology and market innovations. These states are accelerating efforts to anticipate the coming changes and to benefit from the transformative opportunities the new energy system will provide.

In leading states, collaboratives among utilities, public utility commissions, national laboratories, energy technology companies and service providers abound, focusing on smart-grid development, integrating distributed energy resources, developing microgrids and meeting future load through demand management.

In leading states, peak load and reserve capacity planning are focused on grid balancing through automated controls, energy storage, integrating electric vehicles, demand response and microgrids.

In Michigan, reserve capacity needs are being met by refurbishing or building natural gas plants that may operate less than 400 hours per year – the same approach that was used in 1950.

Make no mistake – Michigan is at an energy crossroad. We can join efforts and learn from leading states, or we can pass on innovation, ingenuity and modernity and watch other states reap the benefits. And it is not just about building a modern power system, it is about talent and business attraction, meeting the clean power demands of the Googles, Apples and Amazons, and engineering the most adaptable, reliable, affordable and environmentally benign energy future possible.

Skip Pruss is a principal and co-founder of 5 Lakes Energy LLC in Lansing.

3 thoughts on “Commentary: Looking forward, and backward, in Michigan

  1. Bravo Skip.
    “The same approach that was used in 1950.”
    If we don’t take action, we will likely get Gov. Snyder and Valerie Brader’s plan for the Upper Peninsula. Senior Policy Advisor Valerie Brader has stated publicly that “We are willing to support and work hard to implement ANY solution that does the following: Keeps PIPP up. [We] are willing to look at fewer units, but not losing the plant.” The price tag for EPA upgrades, retrofit to natural gas, and transmission line build out from Lower Michigan or from Canada is estimated at between $1 and $2 billion.
    The U.P. has no significant production or stores of natural gas. The move to natural-gas fired electricity is environmentally irresponsible. Per the Stanford University Wind, Water, and Sunlight group: “Natural gas is not a near-term ‘low greenhouse’-gas alternative, in absolute terms or relative to coal. Moreover, it does not provide a unique or special path to renewable energy, and as a result, it is not bridge fuel and is not a useful component of a sustainable energy plan.” Jacobson and Delucchi 2013, p. 3.
    The U.P. has all the hydro, biomass, wind, & solar it will ever need to be energy independent and cost effective for its customers. But not with Lansing’s solution for us at least.

  2. We have wall to wall republicans here, so the best government money can buy. I’m betting that anything that sends a big check to the existing utilities will be implemented after a costly and pointless revue process.

  3. I think we should just turn the whole issue over to Rich Vanderveen and the rest of hiw troops. That will be sure to keep the lights on and the bills low.