LANSING – Electric utilities in Michigan would have to provide 10 percent of their power from renewable sources under legislation expected before the House Energy and Technology Committee.

Sponsors of the legislation, which had not yet been introduced at the time of the committee meeting, said the goal was to urge development and use of alternative energy without excessively increasing utility bills.

“There are a lot of demands on Michigan business,” said Rep. David Palsrock (R-Manistee), co-chair of the task force that created the legislation. “I would not want to put through costs that would have a detrimental effect on the economy.”

The key to the legislation is renewable energy credits, which utilities can obtain by building their own renewable generation or buying it from other providers. The bills provide additional credit for power generated in the state and using equipment manufactured in the state.

Credits can be purchased from any generator in Michigan or surrounding states, but the power would have to be able to be delivered to the state, said Rep. Jeff Mayes (D-Bay City), the other task force co-chair. While the goal is to be sure alternative energy was replacing traditional generation in the state, Mayes said he did not want to block interstate commerce.

“Some companies in the UP go across the border (for power),” he said. “We did not want to hinder business relationships.”

The legislation also would provide additional credits for alternative power that can be brought online during peak times. For instance, a pump storage plant using renewable power to fill the reservoir would be able to take credit for the power used to pump the water up, not just the power created when the water is released.

The bills include a number of different technologies that would qualify as renewable, but do not require a particular amount of any particular technology to be used. Mayes said the legislation would require only that utilities report on what they are using and why.

Among those technologies is incineration. To qualify the unit would have to meet all emissions standards.

But the provision did raise some concerns. Rep. Kate Ebli (D-Monroe) worried the incinerators could take materials from recycling programs. “My understanding is the incinerator in Detroit does deter from recycling because they need the plastics and the cardboard to get up to the temperature (needed for full incineration),” she said.

Mayes and Palsrock indicated they would consider language to keep incinerators from infringing on recycling programs.

However they do it, electric providers would not be able to escape the standards. Those utilities not taking the steps to meet the portfolio standards would be forced to purchase renewable credits and would not be able to consider those purchases in their rates. “We don’t want an entity to just pay the fine,” Palsrock said. “We want them to buy the RECs.”

Mayes argued the price for alternative energy would tend to track with the fine for not using it, rather than reflecting the actual cost of production, if the state simply required a noncompliance fine.

But the proposal would provide an out, through the Public Service Commission, if renewable energy turns out to be too costly. “In the end our concern as policy makers should be the ratepayers,” Palsrock said.

Utilities could also be let off the hook if they can show there is not enough renewable energy to meet the demand.

Palsrock said adoption of the proposal would force the Legislature to also deal with issues of zoning and other local ordinances that could prohibit siting of alternative energy plants.

“This is a very aggressive plan that’s going to require a lot of space to put this generating equipment,” Mayes said.

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

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