Governors' Wind Energy Coalition

An unusual alliance of interests from both ends of the political spectrum is coming together around a bill package in the Michigan House that aims to make it easier to invest in rooftop solar.

This is the third straight year the five-bill “energy freedom” package (H.B. 5861-5865) has been introduced in Michigan. But yesterday was the first time the legislation got an airing in committee, a debate sparked by a recent order by regulators to end net metering.

The April ruling by the Public Service Commission rankled the rooftop solar industry as well as some legislators, including state Rep. Gary Glenn, the Republican chairman of the House Energy Policy Committee and a sponsor of one of the bills.

Glenn’s legislation would encourage development of subscription-based community solar gardens. Other bills in the package would re-establish net metering, extend the net-metering terms to 20 years instead of the current 10, remove size restrictions on the size of customer-owned solar systems eligible for net metering and lift the 1 percent cap on the number of utility customers who can participate.

The legislation would also allow utilities to establish alternative or “fair value” distributed generation tariffs for large and small customers that require credits for excess energy to be equal to or greater than the utility’s retail rate and factor in social benefits of distributed energy.

“It’s my belief that if we’re going to have a reliable and affordable supply of energy, that it has to be based on the principles of competition and diversity,” Glenn said. “We don’t put all our eggs in one basket, or in this case the basket of two utility monopolies.”

Glenn, a free-market Republican known for criticizing the monopoly power of utilities, was among those most critical of the PSC’s April decision to establish a new distributed generation tariff to replace net metering.

In addition to approving a new billing methodology, the PSC signaled that there will be a reduction in what new solar owners are credited for excess energy put on the grid (Energywire, April 19). Under net metering, customer generators are credited for excess energy production at the utility’s retail rate.

The distributed generation tariff approved by the PSC doesn’t take effect immediately. Utilities must seek specific approval in a rate case filed after June 1, or they can propose an alternative.

That means existing net-metering programs will remain available for at least another year. Also, existing customers will be grandfathered under the existing net-metering policy for a decade.

Stifling development?

But solar advocates, including Glenn, worry that the PSC’s order will lengthen the payback period for consumer rooftop solar investments in a way that will stifle development in a state that has yet to see meaningful solar development.

According to the most recent PSC annual net-metering report, just over 2,500 customers participated in utility net-metering programs in 2016, representing 0.024 percent of the state’s total retail electricity sales.

The committee only heard testimony from supporters of the bill package yesterday.

Michigan’s two large investor-owned utilities, Detroit-based DTE Electric Co. and Consumers Energy, based in Jackson, Mich., oppose the legislation and are expected to testify at a subsequent hearing.

In an emailed statement, DTE spokeswoman Carly Getz said the bills would “maintain and expand net metering subsidies for rooftop solar customers, while not allowing the path of the 2016 energy law to be implemented as designed.”

“If customers have private generation on their property, they are still connected to the power grid — both to sell excess generation to the utility and access utility generation when the sun isn’t shining or during periods where their demand exceeds the generation capabilities of their private system,” Getz said.

Consumers Energy spokeswoman Katelyn Carey likewise said the net metering carries implicit subsidies for non-net-metering customers.

In fact, the subsidy question and how rooftop solar affects other consumers were at the core of yesterday’s debate.

But in an unusual departure from other Midwestern states, including neighboring Indiana, it was the conservative Glenn and a member of the Michigan Conservative Energy Forum defending net metering from criticism by a Democrat, Rep. Brian Elder.

“It is an objective fact that any person that doesn’t have a solar panel on their roof is subsidizing everyone who does,” Elder said, adding that the hundreds of Polish grandmothers on the south side of his hometown of Bay City, Mich., shouldn’t be paying for another person’s solar arrays.

“I represent a district where, quite frankly, people don’t have the affluence to pay for their socially progressive policies,” Elder said.

‘We’re trying to be fair’

Solar advocates, meanwhile, pointed to studies on the value of solar, including one commissioned by a clean energy business group in Michigan, that conclude customers who self-generate energy provide a benefit to the grid.

State Rep. Yousef Rabhi, a Democrat and sponsor of the bill to re-establish net metering for residential customers, said the legislation would also allow require the PSC to open a case to determine an alternative rate for excess generation produced by rooftop solar systems.

Rabhi said the value would include both costs and benefits provided by distributed generation.

“We’d have to look at the full picture of the societal and environmental and economic impact that these solar and alternative energy generation would provide to the system,” he said.

Critics of the PSC’s recent order say the energy laws enacted in 2016 required regulators to consider the benefits of customer-owned generation. But, they say, the commission only zeroed in on systemwide costs of customer-owned solar.

“We’re trying to be fair,” Rabhi said. “We’re trying to say, ‘Let’s look at both sides of the coin.'”

A second hearing is expected on the bills next week.

At least one lawmaker yesterday suggested there’s little interest in energy reforms after the Legislature spent years working through the sweeping overhaul passed in 2016.

Glenn said he hopes the legislation will ultimately be approved unanimously, sending a strong message to the House and Senate.

The committee chairman noted support from both parties for the bills, as well as different motivations for the right and left.

Conservatives see distributed generation as competition and an alternative to taking service from monopoly utilities, while Democrats see rooftop solar as a means to reduce emissions and create jobs.

Glenn noted that the bill is backed by the League of Conservation Voters, which gave him the second-lowest ranking of 110 Michigan House members in its latest scorecard, as well as other environmental groups.

Then he paused while listing names of groups that support the bill, adding, “Wow, I’m on the same side as the Sierra Club.”