Environment Picture

Saving energy, reducing costs are goals of MEC’s work behind the scenes

Utilities in Michigan are implementing Clean Energy legislation passed by the Michigan Legislature and signed into law by Gov. Jennifer Granholm last year (Public Acts 286 and 295 of 2008). Key components of that legislation require new programs in energy efficiency and renewable power.

The legislation was a compromise supported by the Michigan Environmental Council, which fought for stronger measures to secure cost savings through energy efficiency and energy independence from renewable power.

The utilities were required to file plans with the Public Service Commission earlier this year. All of those plans have now been approved (although some with modifications). The highlights include:
  • New energy efficiency programs. Utilities across the state have begun implementation of new energy efficiency programs—the first since the mid-90s. The programs provide incentives for efficiency purchases and upgrades. Such investments typically return $3 for every $1 invested by a business or homeowner. The programs are designed to reduce energy demand by 1% per year by 2012. Detroit Edison predicts that its plan will save ratepayers $4.60 for each $1 spent by the company.
  • More renewable energy. Detroit Edison and Consumers Energy project more than 2,100 megawatts (MW) of new renewable capacity in the state soon. The vast majority of that new power will be on-shore wind projects. The utilities plan to build half the capacity and enter into purchase power agreements with developers who will build the other half. A small amount of the energy will come from new combined heat and power built into industrial facilities (not traditionally thought of as renewable, but allowed under the statute).
  • Net metering. New net metering rules have taken effect which allow smaller renewable generators to receive credit for excess electricity they feed back onto the grid. Residential customers will receive a credit for the full retail price of this electricity. On larger facilities a slightly lower rate is credited back to the customer.
In recent proceedings on the utilities’ plans at the Public Service Commission, an environmental coalition fought to keep the costs of the programs low for ratepayers. The Michigan Environmental Council, Ecology Center, the Environmental Law and Policy Center and the Natural Resources Defense Council succeeded in getting a 50-cent per month reduction in costs from the Commission. Expert witnesses pointed out that if Consumers Energy’s costs for renewable energy matched much lower projections made by Detroit Edison, the surcharge could be lowered by an additional $1 to $2 in the future.

“Michigan ratepayers want lower energy costs—investment in energy efficiency from the utilities will get us there while also creating jobs and cutting pollution,” said Rebecca Stanfield, senior energy advocate for the Natural Resources Defense Council. “All around the country, energy efficiency programs translate into cost savings and cheaper monthly energy bills. But they only work when the utilities implement them with transparency and in partnership with the community.”

For more information, visit the web sites for the utilities’ energy efficiency programs or the state’s net metering information site:
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