Newsletter: Legislature Adjourns for the Year Without Passing Energy Overhaul Legislation

This newsletter was originally published on December 21, 2015.

Legislature Adjourns for the Year Without Passing Energy Overhaul Legislation: A Year in Review

The Michigan Legislature ended its year of legislative action without passing legislation that would overhaul the energy industry. Passing energy reform was one of the early items added the Legislature’s agenda for this term. Now its been stated that passing energy overhaul legislation will be attempted early in 2016.

The process actually began in 2014, when Senate Energy and Technology Chair Mike Nofs (R-Battle Creek) convening an energy policy workgroup to review both energy choice, the renewable portfolio standard (RPS) and energy optimization (EO) standard.  This group involved many stakeholders, including the Michigan EIBC. In early 2015, Governor Rick Snyder gave his address on Michigan’s energy future. In his address he announced that he wanted at least 40 percent of the state’s energy portfolio to be renewables and energy efficiency, provided that renewables remained cost competitive with natural gas. He added in his address that he did not like mandates as a policy.

Legislation was finally introduced in the spring of 2015. House Energy Policy Chair Aric Nesbitt (R-Lawton) introduced HB 4297 and 4298. His legislative package originally completely re-regulated the industry, eliminating energy choice, while also repealing EO and letting the RPS freeze at 2015. In his package, all future energy planning decisions would be made through an integrated resource plan. After hearing testimony on the legislation, Nesbitt announced he would be going back to the drafting table and would try to move his legislation later.

Later in the early summer of 2015, Senate Energy and Technology Chair Mike Nofs (R-Battle Creek) and Vice Chair John Proos (R-St. Joseph) introduced SB 437 and 438. This package kept the 10 percent choice market, but placed new requirements on energy choice providers that many believe would slowly eliminate the market. Both the RPS and EO would be eliminated for electric utilities, while EO would remain for gas providers as “energy waste reduction.” Like the Nesbitt package, future energy decisions would be made through an integrated resource plan.

Over the summer, the Senate Energy and Technology Committee took testimony on both pieces of legislation. The Michigan Energy Innovation Business Council was able to verbal testimony on SB 438 from Brian Pageau from Midwest Energy Group, Prassad Gullapali from Srinergy and Scott Viciana from Ventower Industries, and written testimony from President Liesl Clark on SB 437. After weeks of testimony, Nofs did not move his package out, stating a desire to make 10 evisions and come back.

In the fall, Nesbitt announced that he was going to offer substitute versions of his package. Now the two bills would keep energy choice at the current 10 percent, and like Nofs place new requirements on providers. The integrated resource plan was more fleshed out, but still eliminated EO and let the RPS freeze at 10 percent.

Late on November 5, the House Energy Policy Committee passed HB 4297 and 4298 after a bipartisan deal added new incentives to increase energy waste reduction to 3% with Public Service Commission approval, a verbal agreement to reinstate EO on the floor when legislative language is properly drafted and a new goal that 30 percent of Michigan’s energy comes from a mix of renewables and energy efficiency by 2030. This goal is different from a standard, in that utilities are not mandated to do this nor is there a 50-50 split for ownership of new renewable generation between utilities and independent producers. That split is one of the reasons Michigan has been able to keep the costs for renewables down while also creating a $7.2 billion industry.

Michigan EIBC was fortunate to organize another lobby day with APEX Clean Energy, Chart House Energy, EDF Renewables, Four Elements Energy, Inc., Michigan Biomass, Opower, Solar Winds Power Systems, and Ventower Industries.  Members met with both Republican and Democratic House leadership, and critical members from both sides of the aisle.

It was expected that the Nesbitt package would move from the floor in December, but after the Senate expressed a desire to tackle the issue in the New Year, momentum stalled. It is now expected to remain a focus with hopes of passing legislation in February.


Congress Reaches Bipartisan Deal on Solar and Wind Tax Credits

The Michigan Energy Innovation Business Council (Michigan EIBC), praised the congressional deal reached early this morning to extend the solar investment tax credit (ITC) and wind production tax credit (PTC) for another five years. The PTC had already expired and was awaiting renewal, and the ITC was set to expire at the end of next year. The deal also extends or makes permanent tax credits for energy efficiency, advanced vehicles and biofuels.
“Through bipartisan action, Congress signals its continued support for growing the advanced energy industry in Michigan and provides much needed certainty,” said Michigan EIBC President Liesl Clark. “While all other sources continue to have permanent subsidies in place, the PTC and ITC help level the playing field between the power of the past and the power of the future.”
An agreement was reached between Congressional Republicans and Democrats to allow the oil export ban to be lifted while also extending both the ITC and PTC for five years. The PTC would be fully extended until 2016, with a 20 percent reduction in 2017 and further reductions until phased out in 2020. The current ITC, which allows 30 percent of the cost of installing solar to be written off, will be fully extended for the next five years. The credit will be reduced to 26 percent in 2020, then to a 22 percent credit in 2021 and finally to a 10 percent credit at the end of that year. Furthermore, solar purchasers would now qualify for the credit once construction commenced; instead of once the array was connected. 


Michigan Energy News

MiBiz has an interview with Michigan EIBC President Liesl Clark on our organization, our mission and our hopes for 2016.

Utlity Dive has a story on MISO’s belief that compliance cost with the Clean Power Plan really depends on the less predictable costs of natural gas.

MiBiz also has a piece highlighting energy as a top issue for 2016.

The Holland Sentinel has a piece on Holland being in 4th place for a $5 million Georgetown University Energy Prize for energy reduction.

The Times Herald has a piece about DTE raising their rates another 11 percent.

Midwest Energy News has a story on the Public Service Commisison rejecting a proposal from DTE to raise electric raised for LED streetlamps used by the Southeast Michigan Municipal Lighting Consortium.

Mlive , Midwest Energy News and Utility Dive all have pieces on the Grand Rapids 2030 District, which was formally launched last week.

With the Michigan Legislature approving new tax cuts, the data company Switch is beginning construction around the “pyramid” facility in Gaines Township. Switch has been a large consumer of advanced energy in the past.


National Energy News

Reuters has a piece on how the Paris climate agreement is going to help renewables.

ACORE released the Western Region section of their 50 state report on renewables.

The Oklahoma News has a story on a 750 mile transmission project that would connect to a 4000 MW wind project, showing how even in oil-rich Oklahoma renewables play a role.

Fortune has a piece about Salesforce, a CRM data company, investing in a West Virginia Wind Farm. This is not a PPA, and the energy will be fed into the local grid, but their involvement reduces risk.

Utlity Dive has a piece on how rooftop solar increases the value of one’s home.

San Diego passes a plan to go 100 percent renewable by 2035, supported by Republican Mayor Kevin Faulconer.

Greentech Media has a piece on how the ITC’s extension could boost solar deployments 54 percent by 2020.

Utility Dive has a feature, reviewing the energy efficiency industry in 2015.


Michigan Energy Events
Save the Date: Michigan EIBC is partnering with a number of other organizations for a Corporate Pathways to Renewable Energy conference on Tuesday, February 2, 2016 in Detroit. Additional details and speakers will be released soon

Additional Resources
Advanced Energy Economy (AEE) is home to PowerSuite, a suite of tools that allows companies a one-stop on-line portal to search, track, and collaborate on state legislation and regulatory proceedings from around the country.
PowerSuite includes both BillBoard, the AEE dashboard for managing state legislation, and DocketDash, the AEE dashboard for managing state public utility commission proceedings. Subscription required. is a national solar permitting database that provides information on permitting for solar in jurisdictions across the country. The database includes a variety of information, from average permit turnaround times, to information required to be included in the permit, to contact information for individual jurisdictions. You can browse the requirements for the Michigan cities included in the database here.
The U.S. Department of Energy is offering A Guide to Federal Finance Facilities Available for Energy Efficiency Upgrades and Clean Energy Deployment. The downloadable guide provides information about the various federal financing programs available for energy efficiency and renewable energy — making it easier for state, local and tribal leaders, along with their partners in the private sector, to find capital for energy efficiency and renewable energy projects.
The Department of Energy has offers free public access to accepted peer-reviewed manuscripts or published scientific journal articles from projects funded by the DOE within 12 months of publication.