Old Roadblocks Resurfacing
For many who have been in the energy practice since the PURPA days it seems like history is repeating itself. The Public Utilities Policy Act of 1978 had as its laudable goal the encouragement of renewable energy and energy efficiency. Small power production (renewable) projects and cogeneration (energy efficiency) projects were intended to make the nation more energy efficient and self sufficient. Just as now, ratepayers saw renewable energy and dispersed power as a way to save money while contributing to energy independence. However, progress was impeded by Michigan utilities who challenged the meaning of “avoided cost” and who imposed stifling standby rates. Today the utilities are again impeding the development of alternative energy and again are using purchase power rates and standby rates as two of their weapons. [Setting standby rates at a level that assumes all independent power on the grid will go down at the same time is not appropriate. Notwithstanding a good start on the standby issue in the new net metering rules, except for very small projects standby remains a hurtle and an impediment.] Unless the legislature aggressively addresses competitive pricing and standby rates, it may be déjà vu again in Michigan.
