Wednesday, May 29, 2024
ClimateEnergyEnergy EfficiencyPolicyUtilities

Michigan SB 271: Not-So-Lofty Goals Face Off Against Fossil Fuels

Currently wending its way through the bureaucratic process in Lansing is Senate Bill 271, which, at long last, finally attempts to address some progressive policy measures around energy. Is this the dawning of a new day for Michigan energy policy? Not really. But it is, as Sigur Ros said, ágætis byrjun (an okay start). Incrementalism is at least without zero value, even if it’s not everything we want. Let’s take a look! 

Michigan is currently mulling a new energy bill that would require 100% renewable portfolio standard for public utilities by the year 2035. It’s ambitious and unlikely to happen, but it’s a start.

What’s Hot

Renewable Portfolio Standards (RPS) in the bill require that by 2030, utilities must have a portfolio of at least 60% renewable energy. By 2035, this increases to 100%. This means that by 2035, all energy provided by these utilities must come from renewable sources. This is an imperfect measure, which I’ll explain in the next section, but it’s at least a noble effort. The bill defines “renewable energy resource” as things like wind and solar. Again, a somewhat unfortunate footnote attached to this for the next section.

 

What’s Not

The bill includes amendments which would consider as “renewable” resources municipal solid waste, landfill gas produced by municipal solid waste, and fuel manufactured from waste. However, it excludes pet coke, hazardous waste, coal waste, or scrap tires from this category. Recall that the privately-operated Detroit incinerator– the environmental impact from the demolition of which the mayor brushed off with a question like, “how bad can concrete dust be?”, billed itself as burning a renewable resource, because it met the common definitions: producing that resource (garbage) did not innately require additional environmental degradation, and the resource (garbage) could be easily replenished. Excluding petcoke and coal waste seems like a no-brainer. Thank God we’re not considering scrap tires as a renewable resource, I guess?

 

What’s Next

It’s not clear whether the utilities have the patience or political capital to die on this hill if they do in fact want to fight the legislation. Utilities often sue governments over regulatory issues. In urban planning world, we spend a lot of time thinking about the takings clause of the Fifth Amendment, which, plus oodles of Supreme Court cases for precedent, says that the government is limited in its ability to tell you what to do with property you own if that involves depriving you of the ability to make money. This clause is often invoked in cases where a property owner unsuccessfully and repeatedly petitions the government to do something that is legal, but considered undesirable by whatever policymaker (or possibly Karen Supreme NIMBY neighbors). But in our world where the cost per MW of installed renewable capacity is either at parity or even cheaper than coal or natty gas, it’s impossible for the utilities to argue against it.

Utilities continue to make the “true, but it’s way more complicated than that” argument that a generation mix cannot subsist on solar and wind alone, when they push back on RPS. DTE and CMS will likely be forced to end up buying a ton of RECs or what have you from other places where they actually invest in renewables. While Michigan is prime for wind, solar adoption here has lagged horribly. There does not seem to be enough political appetite for new nuclear, and coal-fired baseload generation fell out of fashion nearly two decades ago. Gas is popular, of course. But it won’t hit those aggressive targets.

Nat M. Zorach

Nat M. Zorach, AICP, MBA, is a city planner and energy professional based in Detroit, where he writes about infrastructure, sustainability, tech, and more. A native of Lancaster, Pennsylvania, he attended Grinnell College in Iowa, the Kogod School of Business at American University, the POCACITO transatlantic program, the SISE program at the University of Illinois Chicago, and he is also a StartingBloc Social Innovation Fellow. He enjoys long walks through historic, disinvested Rust Belt neighborhoods at sunset. (Nat's views and opinions are his own and do not represent those of his employer).

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