Updating MI energy policy: cost, reliability, service

LANSING, Mich. (WOOD) — While state officials had hoped to finish a rewrite of Michigan’s energy policy before the end of the year, that now seems unlikely.

“I hope there’s something will get passed,” Gov. Rick Snyder said. “One might get through one chamber this session or this year, but hopefully early next year, we can get the thing wrapped up in a positive way.”

Because of new federal regulations, the way Michigan produces energy is going to change no matter what the state legislature does. The question is how. For months, stakeholders have been grappling with how energy production in Michigan will change and what kind of impact will it have on cost, reliability and service.

“Twenty-five coal plants in Michigan are going to close in four years, nine of them next year,” former state Sen. Ken Sikkema said.

He studies energy issues for a consulting company and he, like many others, has a particular take on what the new energy policy should look like when it’s finally done.

“We actually think a more fully regulated market is better in terms of price, better in terms of fairness, better in terms of reliability,” Sikkema said.

Currently, 10 percent of customers in the state can choose an electric provider outside of the publicly regulated companies. Some would like to see that “choice” option expanded — it’s one of the hot-button issues when it comes to energy policy reform.

But it seems likely that a new energy policy will leave that option at 10 percent. Prices for choice may rise due to shifting some costs back to those who buy on the open market. Choice advocates would like to see their options expanded, but that is not in either of the two current plans.

The other often-discussed issue is alternative and renewable forms of electricity generation, like wind and solar. Supporters say a certain percentage of production should be mandated as renewable.

“We think it makes a lot of sense to put in statute expectations and standards around their development of renewable energy,” Jack Schmitt of the Michigan League of Conservation Voters said.

But more likely is a goal of more renewable energy, not a mandate.

The most likely replacement for the so-to-be-defunct coal plants is natural gas. Supporters say it’s affordable and plentiful, while opponents say its exposure to market forces make the price volatile. Renewables could also be in the mix if they can meet the cost and reliability demands laid out by utility companies.


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