Michigan Needs to Pass Proposal 3: 25 Percent Renewable Energy by 2025

November 5, 2012 by  
Filed under green energy

655b7 Lake Michigan beach 300x201 Michigan Needs to Pass Proposal 3: 25 Percent Renewable Energy by 2025

Lake Michigan Beach

This election year, Michigan is lining up behind more than 30 other states that have proposed and passed renewable energy mandates with its Proposal 3 that reaches for the energy goal of 25 percent renewable energy by 2025.

Proposal 3:

  • Defines renewable energy as wind, solar, biomass and hydropower.
  • Mandates that by no later than 2025, at least 25 percent of each electricity provider’s annual retail electricity sales in Michigan shall be derived from the generation or purchase of electricity produced from clean renewable electric energy sources. The clean renewable electric energy standard shall be implemented incrementally and in a manner that fosters a diversity of energy generation technologies.
  • Requires that facilities used for satisfying the standard shall be located within Michigan or within the retail customer service territory of any electric utility, municipally-owned electric utility or cooperative electric utility operating in Michigan.
  • Limits the cost of implementing renewable energy solution to consumers. Utilities (monopolies in the state of Michigan) cannot raise consumers’ rates by more than 1 percent in any given year due to renewable energy compliance.
  • Requires that the legislature enact laws to promote and encourage the employment of Michigan residents and the use of equipment manufactured in Michigan in the production and distribution of electricity derived from clean renewable electric energy sources.

Embedding renewable energy into the Constitution

Proposal 3 is actually a constitutional amendment, meaning the language of the proposal will be written directly into the state’s constitution. This is a unique option afforded Michigan voters, but it has served to muddy the waters in some ways. Opponents have made much of the fact that Michigan’s precious constitution is being violated, but actually it has been changed more than 31 times since it went into effect in 1964, so this is nothing new. There are five proposals on the ballot this Tuesday that would amend Michigan’s constitution.

Legislation in Michigan can be proposed after it gains the necessary number of signatures. Proposal 3 needed 322,000 signatures, Michigan Energy, Michigan Jobs submitted 530,000. One avenue is to submit it to the legislature to be voted on, where it is either passed outright, or sent onto to voters. The other is to go around the legislature and submit it as a constitutional amendment. The danger of submitting it to legislature is that they can then turn around and submit their own competing proposal on the same topic, which can confuse voters and prevent measures from being passed. (Details on Michigan’s legislation avenues can be found here.)

Although Michigan passed a ballot in 2008 to require that 10 percent of its energy by renewable by 2015, the current political climate in Michigan, especially the heavy influence of utilities, did not seem conducive to another renewable energy mandate. Sam Gomberg, of the Union of Concerned Scientists, an organization that is working with Michigan Energy Michigan Jobs, said,

“We chose a constitutional amendment because we thought it offered the most direct path to put a clear proposal in front of the people of Michigan so that they understood what they were voting for and they could feel confident that their vote was actually for renewable energy.”

Good for the people

The benefits (Michigan Energy, Michigan Jobs):

  • The creation of 94,000 Michigan jobs that can’t be outsourced.
  • Spark $10.3 billion in new investments.
  • Keep part of the current $1.7 billion Michigan pays other states to import coal.
  • Reduce dependence on coal to offset perpetual rising costs. The cost of bringing coal to Michigan has risen 71 percent since 2006.
  • Bring an innovative industry to Michigan to supplement the rebounding car industry and build the state’s economy.
  • Using more wind and solar will reduce pollution and give Michigan cleaner and healthier air and water which will improve and protect the Great Lakes, a main source of tourism.
  • The dirty coal plants emit toxins that are linked to heart disease, childhood asthma, lung disease and premature death. Eliminating plants will improve health in many areas.
  • Farmers will be able to lease portions of their land for wind farms, supporting clean energy and increasing revenue.

Myths and fears

The first line of offense for opponents of nearly everything in this election cycle is to prey on voters’ fears of having their cost of living increase. Telling voters something will cost them vast amounts more (even if it isn’t true) gives opponents traction and makes their other claims seem more plausible.

Opposing arguments currently flooding Michigan airwaves:

  • Utility bills will increase by hundreds of dollars per year for each household. Utility bills will go up, but not because of renewable energy. Utility companies are already planning substantial rate hikes whether or not this proposal goes through. Proposal 3 language is clear. Rates can only increase 1 percent a year (estimated to be about $1.25 per household) due to efforts toward renewable energy compliance. Switching to renewable energy could also lower rates in the long run. Large rate hikes can solely be blamed on the rising costs of fossil fuel imports. DTE raised rates on residential customers 13.5 percent last year alone.
  • Wind turbines will suddenly pop up all over the state – probably right in your backyard and in the middle of the Great Lakes. This fear is directed at all residents, but especially toward the million-dollar homeowners along the Great Lakes shoreline and the tourism industry. If the Great Lakes are rendered “ugly” due to wind turbines, it could hurt property values and tourism (as if smoky, smelly coal plants are aesthetically pleasing). Even if the 25 percent goal was solely met by wind power (which is unlikely), it would only require 8 percent of Michigan’s total land mass to plant enough wind turbines to generate enough power, and there is plenty of agricultural land to house the turbines without venturing into the Great Lakes.
  • It will cost Michigan taxpayers $12 billion to convert to renewable energy. Again, this cost assumes that wind power is the sole answer and at $4 million per turbine, the taxpayers will be throwing that money away immediately. And even if it did, Gomberg said, so what? It is an investment in a growing industry inside the state, employing and benefitting Michigan residents and spread out over time, as opposed to the $31.3 billion Michigan spent on all forms of energy in 2009 alone, and $22.6 billion of that was for energy resources imported from other states and nations. However, the truth is that the cost of creating renewable energy continues to go down and avoided costs can a long way toward offsetting the cost of meeting this goal.
  • Job creation is a myth – those jobs will go to China. The amendment states clearly that the legislature must pass laws keeping this industry local and employing Michigan residents.

Why now?

Michigan is on track to meet its current renewable energy goal of 10 percent by 2015. Reports have been very positive, including a $100 million influx of new investment in the state between 2008 and 2011. Why increase the goal now? Why not wait until 2015 or let the utilities advance the goal on their own?

Utilities in Michigan are a monopoly and have made it clear that they will not advance past the 10 percent already mandated by law. Also, if construction begins on new coal plants or plans are made to make extensive repairs to ailing plants before 2015, that can lock taxpayers into paying for more dirty energy for 40-60 years and effectively close off the avenue of diversifying energy sources in Michigan.

Requiring 25 percent of the state’s energy source to be renewable energy by 2025 is an achievable goal, according to Gomberg. “We don’t see a lot of barriers to getting there, except the will of the utilities to do so.”

Eric Justian, President of The West Michigan Jobs Group agrees, saying,

“Thirty other states have figured out how to achieve their renewable energy standard, some higher than ours, and are reaping the benefits of it. Illinois (who also implemented a 25 by 2025 measure) has reduced energy costs by $176 million, and Iowa has seen their rates remain steady for about a decade. It would be awesome to see our rates be steady for a decade!”

Increasing the renewable energy standard by 10 percent is already having an effect, according to Justian. He spoke of watching the first international export in years sail out of Muskegon’s harbor.

“A few months ago we exported our first international  export in a decade – a wind turbine blade made by Energetics in Holland (Michigan) – exported to Europe. It’s very visible because people travel down to the harbor to see the ships enter and leave port. There has been a flurry of activity that we haven’t seen in years. We’re using Michigan labor, Michigan parts and Michigan infrastructure. Energetics just doubled its workforce due to a five-year contract to produce blades.”

Contrast that with ugly statistics quoted by David Roberts in Grist:

“Right now, energy bleeds money out of Michigan. Check out this grim diagnosis from the state’s Public Service Commission last year: Michigan is relatively limited in most energy resources and imports 97 percent of its petroleum needs, 82 percent of its natural gas and 100 percent of coal and nuclear fuel from other states and nations. These imports account for about 72 cents of every dollar spent for energy by Michigan’s citizens and businesses… The thing is, it doesn’t have to be this way. Michigan is not limited in its energy resources. In fact, Michigan has enough local renewable energy to power itself three times over.”

So how can Michigan not advance its renewable energy goal? The upsides far outweigh the transparent arguments made by opponents. Gomberg and Justian both look down the road to ever-increasing fossil fuel costs and increasing costs of transporting it into the state and conclude that renewable energy can only benefit Michigan.

Roberts goes on to say:

“The more Michigan develops its local renewable resources, the more electricity generation becomes a boon, an economic growth engine, rather than merely a cost. Energy money stays in the state and circulates in local communities…rather than being transferred to out-of-state fossil-fuel companies. Michigan wins: more economic activity, more jobs, more pollution-free energy, more pride.”

Why not?

And why don’t utilities want to innovate? Isn’t the first rule of business: adapt or die? Other companies have looked to the future and made adjustments to stay competitive. As monopolies in Michigan, utilities feel no such obligation and change will only come about if consumers/voters demand it. And if Proposal 3 doesn’t pass? Gomberg believes that it will not only be a big blow to Michigan, but it will embolden opponents to redouble their efforts to not only block renewable energy initiatives that might be proposed in the future, but attack existing goals.

Instead of continuing to rely on the slowly recovering car industry as the major industry in Michigan, it’s time to look to the future and build new revenue streams, employ Michigan residents again and give college graduates and families a reason to stay.

image: Joel Dinda via Flickr cc (some rights reserved)


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