In 2008, the Michigan Legislature passed Public Act 295. Its stated purpose is "to promote the development of clean energy, renewable energy, and energy optimization through the implementation of a clean, renewable, and energy efficient standard that will cost-effectively do all of the following: (a) Diversify the resources used to reliably meet the energy needs of consumers in this state. (b) Provide greater energy security through the use of indigenous energy resources available within this state. (c) Encourage private investment in renewable energy and energy efficiency. (d) Provide improved air quality and other benefits to energy consumers and citizens of this state." The Act requires Michigan electric providers to comply by using renewable energy credits starting in 2012, ramping up to 10% of electricity sales in 2015. The law requires that the renewable energy credits be sourced from within the State of Michigan, except under certain circumstances and also provides incentive renewable energy credits for things like Michigan labor utilized in the construction of a renewable energy project. Other states in our region, such as Wisconsin and Minnesota, also have renewable energy requirements. The U.S. Department of Energy, along with other federal and regional bodies, have studied widespread regional or national renewable energy standards. As renewable energy grows, many are studying the impact of integrating renewable energy into the electric grid. The North American Electric Reliability Corporation, NERC, recently stated "It is vital that these variable resources are integrated reliably and in a way that supports the continued performance of the BPS [bulk power system] and addresses both planning and operational challenges.
The most recent report prepared by the Michigan Public Service Commission discussing the status of renewable energy in Michigan, Report on the Implementation of the P.A. 295 Renewable Energy Standard and the Cost-Effectiveness of the Energy Standards, may provide a useful reference.
As we approach 2015, policymakers will be considering Michigan's energy future. In order to help better educate the citizens of Michigan about renewable energy, we have developed the following questions:
Click on the Question to Comment through April 25, 2013
- 1. How much renewable energy will be operational in Michigan by the end of 2015? What is the total dollar amount of Michigan renewables investment to date and expected when the 10% goal is reached in 2015?
- 2. To date, what has been Michigan's cost of renewables, and how has that impacted rates paid by residential, commercial, and industrial customers?
- 3. How do Michigan's costs for renewable energy compare to the cost of existing generation and to the cost of new non-renewables generation today?
- 4. What are the predicted costs of new energy generation by type in the future? How would a carbon tax, increased carbon regulation, and the elimination of specialized tax treatment impact those cost estimates?
- 5. What transmission upgrade costs and back-up capacity / integration costs have Michiganders absorbed as part of the current renewables standard? Are any of those offset by other benefits of those investments?
- 6. How can reliability costs and benefits be assessed and incorporated into an analysis of renewables costs? Has any jurisdiction tried to do so, and if so, how?
- 7. How does Michigan's renewables requirement compare to other states/provinces/countries? How are other jurisdictions similar/dissimilar?
31What has been the experience in other jurisdictions in terms of compliance, costs, reliability, and environmental impact?
- 8. What is Michigan's long-term potential for more wind, solar, hydro, biomass, landfill gas, and other renewables sources?
- 9. What is the long-term potential for more wind, solar, hydro, biomass, landfill gas, and other renewables sources in other locations to which Michigan is tied electrically?
- 10. What are the current and projected relative costs of existing and new builds for wind, solar, hydro, biomass, landfill gas, coal, natural gas, nuclear, and other sources?
10How would those differ if placed in another jurisdiction electrically tied to Michigan?
- 11. What are the current and projected relative costs per kilowatt hour for existing and new builds for wind, solar, hydro, biomass, landfill gas, coal, natural gas, nuclear, and other sources? How would those differ if placed in another jurisdiction electrically tied to Michigan?
- 12. What methods have been used by other states or countries to set renewable targets?
- 13. What affect did Michigan's requirement that renewable energy be built in a defined geographic area have? What job growth is attributable to that requirement? What cost, reliability, and environmental impacts are attributable?
- 14. What legal arguments have been posited regarding the legality of requirements/benefits to place renewable energy generation in specific geographic areas, or requirements/benefits related to locally manufactured products? Have any official opinions from courts, attorneys general, etc. made decisions regarding those arguments?
- 15. What has Michigan's experience been with siting renewable and non-renewable energy generation to date? If siting becomes easier or more difficult, how will that impact both cost and the overall renewable capacity of Michigan?
- 16. How has Michigan, and how have other jurisdictions limited the rate impact of renewable energy mandates on the residential, commercial, and industrial sector, if at all? What effect have such rate limitations had on other areas?
- 17. How has Michigan chosen to reflect the costs of renewables on customer bills, and how have other jurisdictions treated the billing of renewable energy?
- 18. How has Michigan handled the decision regarding what entities should construct and own renewable energy (e.g. an incumbent utility, an independent developer, feed-in tariffs)? What has been the practice in other jurisdictions?
Has the type of project, cost of project, etc. varied depending on the entity constructing or owning the project?
- 19. How has Michigan, and how have other jurisdictions, applied energy mandates in situations where an existing provider has excess capacity prior to the mandate?
- 20. How has Michigan, and how have other jurisdictions, treated energy efficiency or optimization and renewables as related or separate? For instance, have credits generated from one or the other been interchangeable or separate?
What have been the cost, reliability, and environmental impacts of different regimes?
- 21. How has Michigan, and how have other jurisdictions, chosen to incentivize or penalize exceeding or falling short of renewable targets?
- 22. Michigan law currently contains provisions for incentive renewable energy credits, and advanced cleaner energy credits.
What impact has the provisions for incentive renewable energy credits and advanced cleaner energy credits had on renewable energy in Michigan? What has been the impact of similar provisions in other jurisdictions?
- 23. How have eligible "renewable"/ "clean"/ "sustainable" energy resources been defined in other jurisdictions? How has the possibility of new forms of energy been accommodated, if at all?
- 24. What has Michigan done in the past regarding carve-outs for certain renewable sources? What have other jurisdictions done? What are the impacts of such carve outs on adaptability, affordability, reliability, and environmental protection?
- 25. Has Michigan, or have other jurisdictions, incentivized dispatchable renewable sources such as biomass compared to intermittent renewables generation? Why or why not?
- 26. Has Michigan, or have other jurisdictions, incentivized energy storage technologies or included energy storage in a renewable or clean energy standard? Why or why not?
- 27. Has Michigan, or have other jurisdictions, incentivized flexible, fast-ramping non-renewable generation as a part of or a complement to the renewable standard? Why or why not?
- 28. Has Michigan, or have other jurisdictions, used a statewide net metering program? How have such systems handled small-scale and larger projects?
What policies have been proposed or tried regarding community renewables, meter aggregation and neighborhood net metering?
- 29. How has Michigan or other jurisdictions proposed addressing possible impacts from the adoption of a federal RPS?
- 30. How has the current law regarding the electric market structure (i.e. electric choice) dealt with renewable energy compliance? How have other states with deregulated and regulated systems addressed compliance?
- 31. What impact has Michigan's retail market structure had on compliance with the renewable energy standard?
- 32. How has Michigan or other jurisdictions designed their renewable standards to adapt to unforeseen circumstances, or proposed to do so? What methods beyond legislative changes have been considered or implemented?
- 33. How does Michigan's renewable capacity compare with other states as a percentage of total electric load?
- 34. How many states with RPS standards have a) achieved the standard, b) modified the standard, or c) frozen compliance due to cost or other factors?
- 35. How has the dispatch of renewable generation changed since the implementation of MISO's Dispatchable Intermittent Resource (DIR) tariff? How has dispatching of renewable energy impacted rates in Michigan?
- 36. To what extent is distributed generation supplying the energy needs of Michigan customers?
- 37. How are renewable energy sources and distributed generation impacting grid operation and reliability?
- 38. Based upon the surcharges collected for renewable energy in Michigan, what percentage of the renewable energy funding in Michigan is provided by each rate class? (residential, commercial, industrial)? How does this compare with other jurisdictions?
- 39. Over what lifecycle are renewable energy projects in Michigan economically evaluated?
- 40. In other jurisdictions, where out-of-state renewables are qualified to meet RPS requirements, how are the REC markets structured to accommodate out-of-state RECs?