Business community turns out to learn about 25 x 2025 proposal



by Cynthia Price
Legal News

Proposal 12-3, to amend the state constitution to establish a standard for renewable energy, attracts both rabid supporters and strident opponents, but it also seems to leave a good percentage of voters confused

Grand Rapids Mayor George Heartwell and the prestigious Union of Concerned Scientists (UCS) co-hosted a “business community dialogue in support of Proposal 3” Wednesday morning at Meijer Gardens, which drew about 50 people. UCS is unabashedly in support of the proposal, drawing national attention to it on its website home page.
UCS began at the Massachusetts Institute of Technology in 1969, and strives not only to work for “a healthy environment and a safer world,” but also to translate scientific findings for general audiences and ensure the integrity of scientific endeavor. Its mission is to combine  science with citizen action “to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choices.”

Its President, Kevin Knobloch, came to Grand Rapids to participate in the panel, partly because, as the article on the UCS home page says, “[T]his is the only straight-up opportunity in this national election cycle to demonstrate strong public support for cleaning up our energy supply...”

The official ballot wording is:

This proposal would:

• Require electric utilities to provide at least 25% of their annual retail sales of electricity from renewable energy sources, which are wind, solar, biomass, and hydropower, by 2025. 

• Limit to not more than 1% per year electric utility rate increases charged to consumers only to achieve compliance with the renewable energy standard.

• Allow annual extensions of the deadline to meet the 25% standard in order to prevent rate increases over the 1% limit. 

• Require the legislature to enact additional laws to encourage the use of Michigan made equipment and employment of Michigan residents.

Should this proposal be approved?

Opponents of the proposal say that there is not enough renewable energy supply, even counting all four of the categories mentioned, to allow for 25% of total energy supply to be from renewables by 2025. Or as Jeff Holyfield, Consumers Energy Director of News and Information, puts it, “Our customers want power even when the wind’s not blowing and the sun’s not shining.”

Holyfield explains the basis for the $12 billion cost-to-consumers figure that the proposal’s opponents, including Consumers Energy, have publicized. “We project that meeting the 25% goal with wind would be the least expensive way. We figure that would mean adding 5000 megawatts of generating capacity and require about 3100 wind turbines. That’s where you get into that $12 billion cost, for buying the turbines, installing them, the amount of land needed. We’re talking about 500,000 acres, or about 17 times the size of Grand Rapids.”

However, supporters point out that the proposal puts a 1% cap on rate increases from renewable energy.

Explains Bruce Goodman of Varnum, “The 1% would be on additional costs attributable solely to renewable energy costs. So if the utility would normally be increasing their rates 5% in a given year, renewable energy costs could not cause that increase to be more than 6%.

“The Michigan Public Service Commission, which has the responsibility for reviewing and approving all electric rates, is fully capable of addressing this issue.”

Though Goodman attended Wednesday’s event, neither he nor Varnum intends to take an official position on the proposal. Goodman does, however, have a better-than-average understanding of what is at issue with renewable energy in order to assist his clients, and he is often in demand for public appearances.

Supporters also refute the likelihood that renewable sources, which have already demonstrated that they can outcompete traditional fossil fuels in current energy supply costs according to Michigan Public Service Commission reports, will wind up costing more. Knobloch said that independent studies indicate an average increase for the higher standard of about 50 cents a month over the first decade, followed by price reductions.

Michigan Environmental Council has put out a report called “The Impact on Utility Rates of the Michigan Clean Renewable Electric Energy Standard,” which states, “The impact of Proposal 3 on electric rates would be minimal.”

And as one of Wednesday’s panel members, Rich Vander Veen of Mackinaw Windpower, noted, current wind contracts can guarantee prices for twenty years — in part because, after infrastructure is in place, there is no cost for wind or solar inputs.

An important reason many support the 25 x 2025 standard is the sense that Michigan is poised to add tens of thousands of job opportunities as a result of gearing up for renewable energy, manufacturing parts that will be sold in Michigan and across the globe.

Knobloch emphasized that the proposal’s fixed standard would give certainty to the wind and solar industries. Another panelist, Nora Reid-Lezotte, confirmed that that would be invaluable for the business her husband co-founded, Four Elements Energy.

A related concern has been the potential for Congress to allow the wind energy tax incentives to expire. Knobloch said afterwards that, while the wind energy industry never intended for those incentives to be permanent, allowing for their temporary continuation would at least keep renewable energy on a level playing field with the oil and gas industries, which have enjoyed subsidies for over a century. If both that continuation and Proposal 3 become a reality, Michigan’s renewable energy industry has great potential to thrive.

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