by Bruce Goodman
DTE Energy is seeking Michigan Public Service Commission (MPSC) approval of two 20-year power purchase agreements and the associated renewable energy credits. The weighted average price for the 3.2 MW landfill gas project in Orion and the 17 MW biomass project in L’Anse is $98.94/MWh. This price is below the level assumed in the DTE Renewable Resource Plan.
by Bruce Goodman
Comprehensive energy supply policy needs to simultaneously address concerns about climate, energy security, and economic viability. Anyone who advocates a program on a single issue needs to be viewed skeptically. The wind does not blow nor the sun shine all the time. There is no single answer – technical nor policywise – to all the problems and issues. There needs to be a consensus that the free market does not appear to be ready to provide answers. The government needs to kick start the problem-solving process with clear goals and simple programs. Everyone needs to accept that the perfect energy supply policy will not spring automatically out of this process. Energy prices will inevitably increase – there is no free lunch. Even a long journey begins with but a single step. That step must now be taken, both at the state and federal levels.
by Bruce Goodman
In December 2008, Detroit Edison issued an RFP for renewable energy credit (REC) contracts from Michigan sources. It received 43 proposals from 11 suppliers. In April, the MPSC approved the third REC contract submitted by Detroit Edison, this one with Boyce Hydro Power, LLC. The average price for the seven-year sale covering four hydro facilities on the Tittabawassee River is $7.75 per REC, well below the $12.46 average price of the first two contracts. The Boyce contract calls for 210,000 RECs per year, with an additional purchase of 112,000 RECs depending on generation. Detroit Edison has previously projected REC prices for twenty-year contracts at $15.66 per REC.
by Bruce Goodman
The Michigan Public Service Commission has announced it will hold a public hearing at 9 a.m. on June 22 for its proposed rules governing renewable energy plans and energy optimization plans. These rules may well set the tone and the future for energy projects in Michigan for the next decade. Provisions include defining the “Michigan content” needed for a 10 percent REC bonus and how to compute RECs for pumped storage and mixed biofuel facilities. Part 2 of the proposed rules contain the details of how utilities are to implement their RPS plans, including rules on the five factors a utility may use to limit participation by bidders in RFP solicitations. Any person may submit written comments (reference Case No. U-15900) which must be received no later than 5 p.m. on July 14. See proposed rules at: http://efile.mpsc.state.mi.us/efile/docs/15900/0001.pdf
by Bruce Goodman
Michigan’s 2008 legislation requiring utilities to purchase energy from and/or to construct renewable energy projects was a drawn out battle with many compromises and a mixed outcome. The MPSC has now proposed implementing rules, and the alternative energy industry needs to pay attention. Rules can never be perfect “right out of the box.” [I am disappointed that neither Part 2 nor Part 3 addresses standby rates, which need to be restructured to better accommodate and encourage self generation.] Do the proposed rules provide the certainty needed for alternative energy projects to get financed and built? Those with experience need to weigh in and make the rules “more perfect.” Read the rules, identify the flaws, attend the hearing, propose alternative language, submit meaningful comments. Now. The devil IS in the details.
In a series of orders, the Michigan Public Service Commission has approved the ground rules by which public utilities in the state will be implementing the RPS mandated by statute in 2008. Except for the competitive bid process for Detroit Edison, renewable energy plans, energy optimization plans, and surcharges were approved in late May. This utility has now submitted a more detailed description of the RFP and bid evaluation process for an expedited hearing. Under the various orders, the MPSC Staff will provide oversight and consultation to ensure competitive and fair RFP processes.
