LANSING – Governor Rick Snyder’s administration is proposing a three-step, more stringent process for utilities looking to build new plants, Valerie Brader, advisor to Snyder, told the Michigan House Energy Policy Committee on Wednesday.
Brader, in a presentation to the committee, said Snyder is proposing a three-step process that would first involve a statewide analysis to determine modeling parameters, which, Brader said, could include what range of natural gas should be modeled.
This process would take about three months, she said. It would ensure when a utility files its plans, they are based on a common set of principles.
“This would be multiple agencies giving input into this,” she said, adding there would also be an analysis of waste reduction potential and cost.
The second step involves the Certificate of Necessity and the integrated resource plan utilities would be required to file. The Public Service Commission would lead the process with input from the Department of Environmental Quality, Brader said.
The goal of this step is to approve a portfolio representing the best value long term that complies with reliability and environmental standards and maximizes adaptability.
Brader said the administration’s proposal builds off of the current process, which is voluntary for utilities and seldom used. However, she said the new proposal seeks the most prudent and reasonable investments, upping the standards from the current process.
“The Powering Michigan’s Future bill package presents a plan for Michigan’s energy future that will create jobs, spark investment and protect our clean air and Great Lakes,” said Lisa Wozniak, Executive Director for the Michigan League of Conservation Voters. “I commend the bill sponsors for their leadership and setting clear and measurable goals to increase our use of renewable energy, reduce energy waste and rein in rising energy costs.
“As the debate over Michigan’s energy policy plays out, the Michigan League of Conservation Voters will continue to advocate for strong standards to protect consumers, hold utilities accountable and ensure forward progress toward a cleaner energy future.”
The PSC would evaluate the portfolios on capital versus non-capital tools, different types of plants, and building a new plant or investing in current plants. The commission could approve, approve with conditions or disapprove.
The commission would be able to require a filing from utilities no more than every two years.
Brader also said it is important that utilities would be allowed to walk away from a project if things change and it no longer makes sense. She said this is important because in other states projects have gone $1 billion over budget because utilities don’t walk away.
She said the third step would only be used if there is some statewide target that must be met by utilities because of environmental requirements or other factors. She said there would be a default plan for non-rate regulated utilities to go into.
Brader said the new proposal would increase adaptability, affordability and reliability from the current process. She also said environmental protections are increased.
She also said the current process puts a limit on the amount of peak shaving that can be compensated. Brader said this is a “mistake” and the new proposal does not include the same limit.
“This is by far more adaptable than what we have today,” Brader said. “With the amount of uncertainty we have in the future, maximizing the adaptability is in the best interest of the utilities, the rate payers and of the state.”
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