News Story

Effort In Lansing To Override Voters' Rebuke of Higher-Cost Energy Mandate

Demonstrators to picket upcoming wind forum

The federal government says virtually all of Michigan, except for the shores of the Great Lakes, is "poor" or "marginal" for wind energy. But that's not stopping a variety of groups and some legislators from pushing to increase the state's renewable energy mandate.

In response, a protest is planned for Monday at the Kellogg Center in East Lansing during the American Wind Energy Association Wind Forum.

At issue is an ongoing effort by the wind energy industry to increase Michigan's current 10 percent government imposed renewable energy mandate. In Michigan, renewable energy has become a euphemism for wind power.

Last November, Michigan voters rejected Proposal 3 by a 64 percent to 36 percent margin. It would have constitutionally increased Michigan's renewable energy mandate to 25 percent by 2025. Yet, in spite of the voters' rejection of the idea just a year ago, wind power proponents continue to pursue higher mandates.

In fact, the mandate percentages now being discussed are higher than the 25 percent of Proposal 3. Mandates of 30 percent and higher are being promoted.

"The names on the speakers list for the AWEA event are the who's-who of wind profiteers and opportunists in the state of Michigan," said Kevon Martis, director of the Interstate Informed Citizens Coalition, which is organizing the protest. "These are the same people who pushed for the failed Proposal 3 ballot measure last year. Our message to them is that 'no means no.' "

In 2008, the state Legislature passed an energy bill that became Public Act 295. The law mandated that 10 percent of Michigan's energy be generated by alternative sources by 2015. That mandate was sold to lawmakers and the public as a means of cutting greenhouse gas emissions, in part, by replacing so-called "dirty" coal burning plants with “clean” wind power.

A federal judge has written that the Michigan law is likely an unconstitutional violation of interstate commerce, since it discriminates against out-of-state companies.

But the law did not require that emission levels be monitored to measure whether the mandate was working. No cost/benefit analysis was required by the state's renewable energy mandate. Instead, it was assumed, apparently on faith, that wind power would be an effective method of decreasing emissions.

Because wind energy's output is dependent on unpredictable changes in the weather, activists who oppose a renewable energy mandate maintain that it is not a standalone replacement for fossil fuel-fired generating plants. Instead they see wind power as — at best — a fuel saving accessory for fossil generation, primarily gas. They point out that, in Michigan, wind energy contracts average $80 per Mwh (megawatt hour) and can only save $25 to $35 per Mwh of fossil fuel.

Those skeptical of the value of wind power in Michigan argue that a steady switch to natural gas would result in lower emissions than occur with wind power and do so at a much reduced cost to consumers.

"Energy policy is a matter of life and death," Martis said. "It must not be the playground for the latest theories of armchair environmentalists. The $2.5 billion squandered on wind energy to date could have actually cut coal emission in half by now had it been spent on gas turbine generation rather than wind (and it would have) delivered cheaper electricity than wind."

Additionally, Martis said that Michigan ratepayers would see lower costs if they could purchase wind energy produced in states where wind is more reliable than it is in Michigan.

"Michigan is locked into 20-year wind power purchase agreements at $80 per Mwh," Martis said. "That same wind energy is available for $30 per Mwh from Iowa. Why should Michigan ratepayers pay 2.5 times what that energy is worth?"

Wind power advocates maintain that higher mandates are worthwhile.

"American wind power is a proven, reliable source of electricity that provides benefits for ratepayers and job-seekers in Michigan and across the country," said Lindsay North of the AWEA. "That's probably why polls show over 70 percent of Americans support growing more wind power (according to Gallup) and nearly three-fourths of Michigan voters want to see the state's use of renewable energy expanded."

North said wind power brings economic benefits to Michigan.

"Over $1.9 billion has been invested in Michigan by wind power," North said. "Michigan landowners receive $2.8 million in lease payments annually. Because of private development of wind in the Great Lakes State, Michigan now ranks 10th in the country in total wind energy related jobs and there are now 40 manufacturing facilities in the state, helping to support more than 3,000 jobs. With the right policies in place, Michigan can add more jobs and more private investment in the years ahead.

"In terms of savings for ratepayers, due to declining costs of wind and other renewables, Detroit-based DTE has decided to slash its renewable energy surcharge, an action that will reduce customer bills by $90 billion," North continued. "And a new report by Synapse Energy Economics indicates doubling the use of wind energy in the Mid-Atlantic and Great Lakes states would save consumers nearly $7 billion per year."

When the mandate was originally signed in 2008, Gov. Jennifer Granholm promised 17,000 jobs. According to the Bureau of Labor Statistics, there were 4,256 jobs in the category that includes solar and wind jobs in 2008. By 2011, that had dropped to 3,728.

Martis and some analysts question why the state needs to mandate select energy sources if they are such good deals for businesses and consumers.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.