LANSING – The Michigan Senate Energy and Technology Committee kicked off testimony from interested stakeholders on its proposal for Michigan’s energy policies and regulations, but despite an immense amount of changes made over the past six months, most of the same people either liked or disliked the bills.

DTE Energy CEO Gerry Anderson was the first to speak and supported SB 437 and SB 438, mostly speaking to what he said was fair that it appeared all individuals or companies in the industry, regardless of whether they are regulated, renewable or individual, would be paying their fair share of the market.

And just like before, energy choice – sometimes referred to as Retail Open Access – was a major issue.

“Since the 2008 legislation capped Retail Open Access at 10 percent, deregulated energy providers have relied on existing generation to serve their customers,” Anderson said. “While this was workable from a reliability standpoint for a time, it is not sustainable going forward, as those plants are now shutting down. Michigan will retire 60 percent of its coal-fired generation, or 30 percent of its total generation, in the next 15 years, and that process has begun.”

The sooner the Legislature can act on energy policy, he said, the sooner energy providers can make decisions about how to replace that market need.

Sen. Mike Shirkey (R-Clarklake) pressed Anderson on what prevented his company from building right now, to which Anderson said they did not want to provide further service for those in the choice market.

“We’re not going to put shovels in the ground for that 10 percent of the market … This is more about protecting reliability for the state,” Anderson said, working in a compliment about the legislation’s Integrated Resource Plan process.

But Shirkey pressed him on the IRP aspect of the bill too, asking what changed between 2008 and now that utilities like DTE want a full end to the choice provision.

“I think this is one of those live and learn things, and you can’t set up a market where you have it both ways. That isn’t a real market and it doesn’t work,” Mr. Anderson said.

Anderson was immediately followed by Dan Dasho, president and CEO of Cloverland Electric, who largely supported the bills – especially the IRP process – but raised concerns about the legislation still containing language that would effectively allow the choice disaster involving Cliffs Natural Resources – which operates two iron-ore mines in the UP – to happen again.

Absent that language, Dasho said, Cloverland could support the bills.

Alternative electric suppliers, of course, were not supportive of the bills. Among those was Teresa Ringenbach, a government affairs liaison for Direct Energy, which operates in Michigan. She said the company is not concerned about provisions in the bills that want alternative suppliers to contract or own energy for two years, but they do have concerns about three “loopholes” that “could damage our customer’s ability to continue to participate in choice,” she told the committee.

At the core of the issues is the timing. Depending on when the legislation becomes effective, assuming it is signed into law, Direct Energy and other alternative suppliers would be submitting their contracted requirements before it knows what planning requirements the Midcontinent Independent Systems Operator is asking of the state, she said.

And there are opportunities for market manipulation, as well as a lack of protection for customers actually on choice, Ringenbach said. Among those is the lack of provision that in-state utilities sell their excess generation to Michigan companies first, as well as the lack of provisions to prevent price gouging or the ability a utility to withhold energy, the latter of which is illegal.

And there is a lack of process for retail load switching, she said.

“MISO has clear policies for retail load switching – as load changes, they’re going to shift capacity with the load. That needs to be recognized in this legislation,” Ms. Ringenbach said. “If not, you’re asking contractors to set their capacity two years out. At some point out, customers are going to switch,” which could cause some suppliers to have too much energy and others to have too little.

Josh Lunger with the Grand Rapids Area Chamber of Commerce appeared with John DeAngelis, energy program manager at Steelcase, to oppose the legislation as well, predominately over its provisions on choice. Mr. DeAngelis said Steelcase has saved between 20 and 25 percent on its energy costs due to being on choice, and it is also a proponent of renewable energy, which gets little attention in the Senate bills.

DeAngelis, like Ringenbach, also pointed to a lack of market protections as an issue, which was also raised as a problem for members of the Michigan Conservative Energy Forum, which sent a statement saying the bills are protecting utility profits at the expense of ratepayers.

MCEF acknowledged the amount of work on the bills to this point but said more needed to be done to gain its support.

“While first and foremost protecting ratepayers means access to affordable and reliable power, it’s also about protecting the rights of those who want the option of self-generation, who want to be more energy efficient, or who want more access to renewable energy,” Larry Ward, the group’s executive director, said.

Jim MacInnes, chair of the Utility Consumer Participation Board, said he was also pleased to see increased funding and abilities for the UCPB but was disappointed the bills had “too many other places where ratepayer rights are weakened,” he said in a statement.

John Freeman, a former state representative and now owner of Homeland Solar in Ann Arbor, also spoke to the committee about his displeasure with the net metering provisions of the bill. That too had been an issue when the committee last took up the bills, in a different format, six months ago.

The current net metering law allows people to upload excess energy to the grid in any given month and receive a credit of 15 cents per kilowatt-hour. If they’re not producing enough, they can draw upon this credit, he said, but this legislation makes it so that all net metering – renamed to distributed generation – is on a “buy-all, sell-all basis so that the (energy) would have to be sold to the utility” at a price of 4 cents per kilowatt-hour.

“(This is) legalizing a taking by a state-sponsored monopoly,” Mr. Freeman said. “Senate Bill 438 is letting a utility take the private generation of energy and paying a minimum amount in return.”

Sen. Mike Nofs (R-Battle Creek) said after the meeting that he expects to have more committee hearings next week, but how many more come after that will depend on who else wants to speak on the legislation.

This story was published by Gongwer News Service. To subscribe, click on www.gongwer.com