Public Act 295 of 2008 addressed energy efficiency through its provisions for energy optimization for electricity and for natural gas. The law requires Michigan regulated utilities, cooperatives, and municipalities to file proposed energy optimization plans with the MPSC. It states that the goal of an energy optimization plan "shall be to reduce the future costs of provider service to customers. In particular, the EO plan shall be designed to delay the need for constructing new electric generating facilities and thereby protect consumers from incurring the costs of such construction." The law specifies initial energy savings requirements for 2009, ramping up to annual incremental energy savings of 1% of total annual retail electricity sales and 0.75% of total annual retail natural gas sales in 2012. The law holds the requirements constant from 2012 through 2015. In his recent address on energy, Governor Snyder stated "Energy efficiency is the best example of a no-regrets policy Michigan can have. It makes us more reliable, more affordable and protects our environment." As we approach 2015, policymakers will be considering Michigan's energy future.
The most recent report prepared by the Michigan Public Service Commission discussing energy efficiency in Michigan, titled 2012 Report on the Implementation of P.A. 295 Utility Energy Optimization Programs, may provide a useful reference.
In order to help better educate the citizens of Michigan about energy efficiency, we have developed the following questions:
Click on the Question to Comment through April 25, 2013
- 1. What are Michigan's current Energy Optimization standards, and what was the timeline for compliance? What is the compliance history?
- 2. What studies, data, or reports should be reviewed or prepared to appropriately measure if the current energy efficiency programs are cost effective?
- 3. What are the total dollar amounts of investment and savings achieved to date, and what levels are expected to be achieved when the 2012 energy savings goals are reached for natural gas and electricity?
Will the 2012 energy optimization standard continue to be achieved through 2015 and beyond?
- 4. What is the history of the cost of conserved energy for natural gas and electric efficiency programs in Michigan by class (residential and non-residential)? How does this cost compare to the costs of new and existing generation? What is the history of the savings for participants and non-participants?
- 5. Can energy efficiency efforts impact reliability, and if so, how have Michigan and other jurisdictions addressed that in their efficiency standards and implementation?
- 6. How does Michigan compare to other states / provinces / countries with respect to energy efficiency standards? Are the standards correlated with the cost of energy or excess generating capacity in such jurisdictions?
How does Michigan's efficiency standard compare given our cost of energy and generating capacity?
- 7. What are the related cost and benefits (re affordability, reliability, and the environment) of a range of possible energy efficiency standards (including maintaining our current standard, and increasing it to various levels?
- 8. How has Michigan, and how have other jurisdictions, treated various customer classes in energy efficiency standards?
- 9. What have other jurisdictions' energy efficiency programs relied on: mandates, incentives, or both? What has the experience been with mandates and incentives?
- 10. Given current technology, how much energy efficiency is technically feasible in Michigan? What is the remaining cost-effective energy efficiency potential in MI, taking into account: 1) what has been tapped to date; and
2) what will be tapped by the end of 2015 through utility energy optimization programs?
- 11. The current Energy Optimization standards are a type of numerical standard, i.e. one that explicitly defines the quantity of energy savings to be achieved for a given program year (Megawatt hours or Mcf), based on retail sales. Have other jurisdictions used other methods (including non-numerical standards, or Commission discretion to impose requirements), and if so, what was the result?
- 12. Has Michigan and have other jurisdictions evaluated energy efficiency programs based upon first year savings and/or on lifecycle savings?
- 13. Has Michigan, and have other jurisdictions, imposed spending caps? If so, what has the experience been?
- 14. What methods for measuring costs and benefits (e.g. Utility Resource Cost Test or Total Resource Cost) have been proposed or used by various jurisdictions, and what is the effect of using one method over another? Are annual savings or predicted lifecycle levelized costs used more often, and what effect does selecting one option over another have?
- 15. How have energy efficiency programs in Michigan or other jurisdictions addressed non-traditional proposals for energy efficiency (e.g. digital metering, grid management technologies, or improvements on the utility side of the meter)?
What has been the effect of the inclusion or lack thereof?
- 16. Have energy efficiency programs in Michigan or other jurisdictions addressed long-lifecycle programming such as interest rate buy-downs, home performance programs, industrial whole process programs, and deep savings programs for business customers?
- 17. What "decoupling mechanisms" have been used by Michigan and other jurisdictions as part of an energy efficiency standard? What have been the costs and benefits associated with those mechanisms?
- 18. How has Michigan, and how have other jurisdictions, coordinated weatherization for low-income customers and other energy efficiency efforts?
- 19. Has Michigan, or have any other jurisdictions, attempted to incentivize peak shaving vs. general energy efficiency? What have been the costs and benefits associated with these policies?
- 20. What impact has Michigan's retail choice electricity market had upon energy optimization and compliance in Michigan? What has been the impact in other jurisdictions?
- 21. How does Michigan's Energy Optimization Standard and Michigan's Renewable Energy Standard interrelate in terms of planning, implementation and compliance? How does energy efficiency and renewable energy interrelate in other jurisdictions?
- 22. How has Michigan or other jurisdictions designed their efficiency standards to adapt to unforeseen circumstances, or proposed to do so? What methods beyond legislative changes have been considered or implemented?