LANSING ? Michigan’s electric and natural gas utilities would have to implement energy efficiency programs and electric service providers would have to produce or purchase 10 percent of their power through renewable energy resources by 2015 under legislation overwhelmingly approved by the House Energy and Technology Committee on Wednesday.

However, all of the lead lawmakers on the bills and industry officials said more work has to and will be done before the entire chamber votes on the legislation.

Approved by all members, save Rep. John Moolenaar (R-Midland), were HB 5525 (energy efficiency), HB 5548 and HB 5549 (renewable portfolio standard).

Committee Chair Rep. Frank Accavitti (D-Eastpointe) said while it’s apparent more negotiations have to take place on those bills, he moved them out of committee in an effort to spur talks on all issues, including changes to electric consumer choice, commonly referred to as PA 141.

He said the House could approve the bills by the Easter break and that the entire Legislature and Governor Jennifer Granholm should come to agreement by the summer.

In fact, all the legislation including re-regulation matters, remained tie-barred to the energy efficiency and renewable portfolio standard bills (HB, 5383, HB 5384 , HB 5520 , HB 5521 , HB 5522 , HB 5523 and HB 5524 ).

Under the energy efficiency bill, electric utilities would have to meet energy savings in 2008 and 2009 equivalent to 0.3 percent of the total annual weather-normalized retail electricity sales in kilowatt hours in 2007. That would increase to 0.5 percent in 2010, 0.75 percent in 2011 and 1 percent in 2012.

Natural gas utilities would have to meet a standard of 0.1 percent in 2008 and 2009, followed by 0.25 percent in 2010, 0.5 percent in 2011 and 0.75 percent in 2012. All energy efficiency plans would require approval from the Public Service Commission.

If a utility achieved more savings than required in a particular year, the savings could be carried forward to the next, though they could not to exceed one-third of the next year’s standard. There is a carve-out in the legislation for Indiana Michigan Power that allows it after two years to petition the PSC and demonstrate why the energy efficiency performance standards can’t be cost-effectively met.

Utilities that meet or exceed the standard for a particular year would receive an incentive calculated as a percentage of the net savings customers receive from the programs. Large customers that complete energy efficient projects also would receive a credit against what costs they otherwise would incur. The bill also calls for the PSC to promote load management.

Under the renewable portfolio standard legislation, renewable energy resources would include biomass, geothermal, solar thermal, photovoltaic cells and panels, industrial cogeneration, existing incineration, wind, hydroelectric power and landfill gas.

Credits would be awarded to utilities based on each megawatt hour of electricity from a renewable energy source, though the weight of each credit depends on the type of renewable energy.

The committee amended the legislation to cap costs for consumers. Rep. David Palsrok (R-Manistee) said under an eight-year plan, residential customers would have been paying $130 more a year, commercial customers would see bills increase by $199 and industrial customers would pay $2,000 more annually. Instead, the legislation spreads the cost over a 20-year process.

Palsrok said that is important because so many customers are already in arrears when it comes to paying their energy bills because of the state’s struggling economy.

While he voted for the bills, Rep. Fred Miller (D-Mount Clemens) said he would offer a floor substitute to bump the portfolio standard up to 20 percent by 2025.

Instead of testimony, most groups simply submitted cards to show their level of support for the legislation.

Supporting all three bills was the Michigan Environmental Council, PSC and Michigan Sustainable Energy Coalition (though Executive Director Andy Such did testify about the need to compare new renewables with new coal costs and changes to how the bills effect contracts).

Supporting all three bills in concept was Consumers Energy, DTE Energy, the Michigan Municipal Electric Association and Michigan Student Sustainable Energy Coalition. The Association of Businesses Advocating Tariff Equity supports HB 5525.

The Michigan Chamber of Commerce and Michigan Manufacturers Association are neutral on all three bills. Indiana Michigan Power is neutral on HB 5525.

The Michigan Farm Bureau supports HB 5548 and HB 5549 in concept, but wants the tie-bars removed. We Energies supports the two bills with further amendments.

Michigan Biomass is opposed to the bills over concerns to it putting added pressures on the wood supply, which Rep. Jeff Mayes (D-Bay City) said would be addressed.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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