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Michigan becomes a national leader in climate action with new legislation, making progress on the goals of the MI Healthy Climate Plan

TLDR: Michigan’s Clean Energy Future is Bright

  • Top 5 state for clean energy commitments.
  • Number two in the country in drawing down federal funding for climate and clean energy.
  • Number one in the Midwest for clean energy jobs, clean energy growing twice as fast as overall economy.
  • Newly passed laws will:
    • create 160,000 jobs,
    • save households $145 annually on average,
    • bring home $8 billion in federal tax dollars, and
    • implement the MI Healthy Climate Plan.

    Aerial view of Lake Winds Energy Park Wind Turbines in Mason County. Courtesy of MDOT.

Aerial view of Lake Winds Energy Park wind turbines in Mason County. Courtesy of MDOT.

 

MI Healthy Climate Plan
2023 was an unprecedented year for bold climate action for Michigan. The Michigan legislature passed important climate legislation that included key recommendations from the MI Healthy Climate Plan, Governor Gretchen Whitmer’s plan that charts a path towards 100% carbon neutrality by 2050.

The MI Healthy Climate Plan included a ‘Roadmap to 2030’ to ensure meaningful progress on climate before the end of the decade to ensure alignment with the goals of the Paris Climate Agreement. The Roadmap prioritized areas where the biggest, most rapid gains in GHG reductions can be made– electricity, transportation, and buildings. Given that many of the needed transportation and building solutions will rely on increased use of electricity, the Roadmap calls for ambitious and immediate action in efforts to deploy and use more clean and renewable energy. The Clean Energy Future Package and the Clean Energy Jobs Act lay the foundation for the rapid transition to a clean electric grid called for in the Roadmap.

Bold Action from the Michigan Legislature
In November, just before they adjourned for the year, the legislature passed the Clean Energy Future Package (Senate Bills 271, 273, 277, 502, 519) and the Clean Energy and Jobs Act (House Bills 5120, 5121) containing key climate initiatives that were called for in the Roadmap. These bills not only help the state implement the MI Healthy Climate Plan but will, according to a recent report, save Michigan households an average of $145 a year in energy costs, help the state secure nearly $8 billion in federal investment, and will spur the creation of almost 160,000 jobs.

The Clean Energy Future package included five bills that align with, and in many cases exceed, the Roadmap’s recommendations, including recommendations to expand and site clean and renewable energy resources, expand energy efficiency offerings, address energy affordability, support workforce development and job training, evaluate potential impacts on environmental justice communities, codify just transition efforts, and more.

  • Senate Bill 271 (Sen. Geiss, D-Taylor) makes Michigan a national clean energy leader by setting a 100% clean energy standard by 2040, expanding Michigan’s renewable energy standard (currently at approximately 16 percent) to 60% (a 4x increase in renewables in just over 10 years!) by 2030, establishing a 2,500-megawatt storage standard by 2030, increasing access to rooftop solar from one to ten percent, and more.
  • Senate Bill 273 (Sen. Singh, D-East Lansing) expands Michigan’s national leadership on energy efficiency programs and lowers energy costs for families by requiring all utilities to offer energy efficiency programs, increasing energy efficiency standards for both electric and natural gas utilities, allowing for electrification and fuel switching in energy efficiency programs, setting, for the first time ever, a requirement to offer low-income energy efficiency programs, and more.
  • Senate Bill 277 (Sen. McDonald-Rivet, D-Bay City) guarantees farmers can utilize their properties as they see fit by ensuring that solar facilities are permitted uses for farmland under a development rights agreement under the state’s Farmland and Open Space Preservation Act.
  • Senate Bill 502 (Sen. Shink, D- Northfield Township) ensures the clean energy transition will be equitable by allowing new considerations for climate, environmental justice, and affordability the state’s utility regulator, the Michigan Public Service Commission, in long-term energy planning efforts. It also establishes the strongest labor standards in the country for clean energy projects, expands opportunity and resources to support citizens getting involved in energy decision making, and more.
  • Senate Bill 519 (Sen. Singh, D-East Lansing) safeguards workers or communities by creating the Office of Worker and Community Economic Transition, an office to protect workers and communities who have hosted fossil generation during the ongoing energy transition.

    The Clean Energy and Jobs Act included HB 5120 (Rep. Aiyash, D-Hamtramck) and HB 5121 (Rep. Puri, D-Canton) which streamlines the process for deploying renewable energy projects while supporting local governments. These bills aligned with the Roadmap’s siting recommendations and addressed one of the most significant barriers to deploying renewable energy at scale, ensuring the state can maintain reliability and meet our clean energy goals.

    These bills built on legislative action from earlier in the year. In July, Governor Gretchen Whitmer signed four bipartisan bills aligned with the Roadmap’s recommendations to expand and site clean energy resources and adopt tools to finance clean energy projects.

  • HBs 4317 and 4318 (Rep. Neeley, D-Flint; Rep. VanderWall, R-Ludington) cut red tape and cleared the way for more solar energy in Michigan while ensuring communities are supported for hosting projects.
  • SBs 302 and 303 (Sen. McDonald Rivet, D-Bay City; Sen. Camilleri, D- Brownstown Township) expanded the eligibility of properties and projects that can utilize Commercial Property Assessed Clean Energy (C-PACE) financing for energy efficiency, clean energy, and climate resiliency projects.

Impact of the Legislature’s Action
The legislature’s actions this year will rocket Michigan into national clean energy leadership and ensure our state’s ambition meets the urgency of the climate crisis. The bills balance reliability and affordability while meeting many of the overall objectives of the MI Healthy Climate Plan— lowering energy costs, creating family-sustaining jobs, protecting our air, water, and public health for current and future generations, addressing environmental injustices, bringing federal tax dollars home, shoring up energy independence, and mitigating climate change.

MI Healthy Climate Plan Recommendation

2023 Clean Energy Legislation

Meet a goal of 100% clean energy no later than 2050

Requires 80% clean energy by 2035 and 100% by 2040.

Set a 50% renewable energy standard by 2030

Commits to 50% renewable energy by 2030 and 60% by 2035.

Increase options for customer-driven renewable energy, such as rooftop solar and voluntary green pricing programs.

Increases the cap on distributed generation resources like rooftop solar from 1% to 10%.

Statewide storage target to deploy 4,000 MW of grid-scale storage by 2040, with an interim goal of 2,500 MW by 2030

Establishes an energy storage mandate of 2,500 MW by 2030.

Address barriers to siting renewable energy

Streamlines the siting process for large-scale wind, solar, and storage projects.

Clarifies solar energy taxation, allows local governments and commercial solar energy developments to opt into payments in lieu of taxes (PILT).

Guarantees farmers can utilize their properties as they see fit, including to host solar projects.

Achieve at least 2% annual electric energy efficiency savings by increasing the current energy waste reduction target for electric utilities.

Increases Michigan’s EWR standard to 1.5% and sets a goal of 2% for electric utilities (with corresponding increases for natural gas utilities).

Requires low-income programming with increasing minimum spend levels that ramp up to 25% by 2030.

Requires MPSC assess energy efficiency every four years.

Restore the energy waste reduction target for municipal and cooperative electric utilities.

Reestablishes energy waste reduction standards for municipal and cooperative utilities.

Incentivize energy efficient appliances that yield immediate energy cost savings.

Creates new opportunities for efficient electrification, fuel switching, and whole home improvement.

Requires MPSC assess electrification every four years.

Increase funding for the Utility Consumer Representation Fund, managed by the Utility Consumer Participation Board (UCPB), to support ratepayer advocates in their interventions at the Michigan Public Service Commission.

Doubles UCPB funding, expands the number of cases the UCPB can intervene in, and prioritizes UCPB grants in environmental justice communities and communities with high energy burden.

Adopt and promote property assessed clean energy programs (PACE).

Expands the eligibility of properties and projects for Commercial Property Assessed Clean Energy (C-PACE) financing.

Expand on the efforts of the Michigan Public Service Commission to conduct an environmental justice and health impact analysis as part of Integrated Resource Planning (IRP) so the potential community impacts of utility investment decisions are more fully considered.

Allows the MPSC, for the first time, to consider climate, affordability, and environmental justice (EJ) in utility IRPs.

Expands EGLE‘s IRP advisory opinion to include new evaluations including the potential impacts of the IRP on EJ and public health.

Requires MPSC EJ impacts and programs every four years.

Requires the MPSC to conduct an EJ analysis on the siting of any proposed new, abated natural gas facility and requires the utilities to undertake a similar analysis on fossil fuel peaker plant retirements to ensure community impact is taken into consideration in addition to economics.

Provide support and best practices to communities addressing economic transitions from closures of fossil fuel facilities and other large industrial operations.

Creates the Office of Worker and Community Economic Transition within the Department of Labor and Economic Opportunity to assist workers, communities, and employers during the transition to clean energy and electric vehicles.

Strengthen and create workforce development, job training, pre-apprenticeship/apprenticeship, joint labor management training, and other such programs for in-demand clean energy jobs. Ensure these programs are federally certified by the Department of Labor where applicable.

Requires all projects approved in IRPs and renewable siting cases pay workers prevailing wage, enter into project labor agreements, and utilize Department of Labor certified apprenticeships.

Incentivize workforce development and training for workers experiencing energy-related employment transitions and those in underrepresented or disproportionately impacted communities.

Encourages diverse workforce development and hiring from environmental justice and low-income communities for EWR programs.