by Bruce Goodman 

What does it take for a state (that is not California) to have an energy policy?  The question is timely because elections are approaching and one would hope the candidates would address all the important issues.  But will anyone take a public stand on unresolved energy issues: increasing the renewable portfolio standard percentage; new coal-fired generation; feed-in tariffs; standby rates; recommendations of the Great Lakes Wind Council or the Climate Action Council?  I suspect not.  Thus come January we are likely to continue with state energy policy “on the fly”, with a dash of gridlock and pinch of skepticism.  Let the Feds make the hard decisions on GHG regulation and renewable energy standards.  Term limits have done their job—left Michigan with a legislature with little institutional memory and little legislative expertise to address complicated issues such as energy.  Hey, how about energy platforms and energy debates in all the state races so that we can get these issues on the table.  Watt would be wrong with that?

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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

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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.

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by Bruce Goodman

Pro Renewables of Portage, Michigan plans to make it possible for industry to use wasted energy to produce its own electricity. As the Midwest distributor of the 50 kW Green Machine produced by ElectraTherm Inc., the company will be selling and installing the equipment which can capture heat normally wasted in manufacturing and use that heat to create electricity. The ROI on the $150,000 to $200,000 equipment is anticipated to be five years or less (without applying any incentives).

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by Bruce Goodman

New forms of distributed energy are one of the promises of renewable energy. There can be many smaller, even very small, electric generating stations dispersed throughout Michigan producing energy from local resources. It is the energy equivalent of buying local, and does not require transmission grid upgrades. But utility-imposed standby rates stand as an impediment. Ostensibly designed to compensate a utility for providing backup power to self generation, standby charges are too often structured to discourage distributed generation. These charges take away the economic incentive to build small energy centers. It is time to take the gloves off and either have reasonable standby rates or institute net metering for sources up to 5 MW. The MPSC can do the former; the Legislature must do the latter. Michigan’s energy future depends on it.

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by Bruce Goodman

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.

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by Bruce Goodman

There is a disconnect in the public discourse on electric generation in Michigan.  It revolves around the confusion caused by such terms as “capacity”, “availability”, “energy”, “reliability”,  “intermittent”, “firm”, “spot market”, “backup”, “baseload”, “efficiency” and other energy jargon.  Energy policy cannot afford loose talk or loose thinking. The call for energy efficiency and alternative energy requires a better understanding of all these concepts. At the most basic level the public (and its leaders) needs to know that a comprehensive energy policy requires significant baseload capacity (MW) so that  alternative energy as we currently know it (MWh) can successfully contribute to energy security for citizens and businesses.  With an aging fleet of coal burning power plants, a manufacturing based economy, and a history of environmental protection Michigan needs the collective wisdom of economists, engineers, environmentalists, industry, business and politicians to achieve reliable and affordable power and a balanced energy portfolio (and capacity portfolio) of renewable energy, energy efficiency, and replacement baseload generation.

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