Michigan House approves energy bills on final day of term

Source: By DAVID EGGERT Associated Press • Posted: Monday, December 19, 2016

LANSING, Mich. (AP) — The Michigan Legislature approved a rewrite of state energy laws, voting on the final day of the two-year term Thursday to boost the required use of renewable sources of power and to keep intact some competition in the electricity market.

The bills, which passed 79-28 and 76-31 with bipartisan votes in the Republican-led House, then cleared the Senate 33-4. Gov. Rick Snyder will sign the legislation, which has been one of his top priorities.

The House GOP had long been at an impasse on an energy overhaul, until changes were made to mollify proponents of the “choice” program that gives competitors up to 10 percent of sales in the territories of utility giants DTE Electric and Consumers Energy.

“This is a big win for our friends and neighbors and hometown residential ratepayers across the state and it’s a win for in-state Michigan energy,” said House Energy Policy Committee Chairman Aric Nesbitt, a Lawton Republican who highlighted a move to make choice customers pay for peak capacity like other ratepayers do. “Everybody gave a little to produce what I think is a good long-term energy package.”

Starting about 4 a.m. Thursday, GOP Gov. Rick Snyder briefed House Republicans on what was a tentative deal for more than an hour to cap what had been a nearly 20-hour session. Tired members then broke until the afternoon, finally passing the heavily lobbied, highly complex bills after negotiators had more time to review draft legislation.

The bills would:

— require electric providers to produce 15 percent of their power from wind or other renewable sources by the end of 2021, up from 10 percent now.

— set a non-binding goal of meeting 35 percent of Michigan’s power needs by 2025 through a combination of renewable energy and energy conservation.

— keep intact, at least through 2020, a requirement that utilities save a minimum amount of power each year with efficiency programs but also boost incentives for utilities that hit higher targets. “That is going to save a significant amount of money for businesses and homeowners across the state as they use less and less energy because their homes and their businesses are retrofitted to be able to manage their energy costs much better,” said Rep. Sam Singh, an East Lansing Democrat who also touted the higher green power requirement.

— detail how state regulators would set capacity charges that customers of alternative suppliers, which supply the power through the utilities’ distribution systems, could have to pay to help meet reserve margins. A coalition of major companies and school districts that now buy in the choice market said it secured “guardrails” if a Public Service Commission process is used instead of one through a regional transmission entity.

— specify that if customers return to their home utility, they could not go back to a competitor for six years. Because the 10 percent limit has been reached, more than 11,000 Consumers and DTE customers are in a queue waiting to buy from competitors. The legislation specifies that if market conditions change, competitors lose customers in mass to the utilities with no new customers to take their place and choice falls below 10 percent, that new ratio would become the cap for six years.

— not apply — for now — a “grid” charge to customers participating in a net metering program, instead requiring a study to determine an appropriate fee. These are residents and businesses with their own wind turbines, solar panels or other types of renewable sources that reduce their electric bills. Existing net metering customers would avoid the future charge.

 The major utilities and interests with which they had had differences both applauded the legislative action.