Michigan governor weighs energy agenda

Six months after taking office and dealing with more pressing budgetary and economic issues, Michigan Governor Rick Snyder is turning his attention to energy. The Michigan Legislature recently passed a new budget that overhauled the tax system and reduced taxes on businesses. Left untouched for now was a comprehensive 2008 energy law that did a number of things: established a renewable portfolio standard that requires utilities to get at least 10% of their power from green sources such as wind and solar by 2015; imposed a 10% cap on electric choice, effectively giving 90% of the market to Detroit Edison and Consumers Energy, the states largest electric utilities; and allowed utilities to self implement new electric rates, subject to possible refund, if the Public Service Commission has not ruled on a case within a certain length of time. Soon, Snyder, a Republican and former businessman who succeeded two-term Democratic Governor Jennifer Granholm, plans to begin addressing the states energy needs, his press secretary, Sara Wurfel, said. Until now, Weve been primarily focused on the economy, the budget and taxes, she said. But lately, There have been a couple of meetings about putting a team together on energy policy . . . hes been reviewing and assessing. For some, including David Waymire, director of the Customer Choice Coalition, a high-level debate on energy cannot come quickly enough. His group advocates raising or eliminating the choice cap, arguing Michigans high electric rates are a drag on economic development. Waymire claims momentum is on his side. The Legislature, he said, just approved laws that require school districts to bid for various services such as cafeteria and street cleaning. But schools are still prohibited from seeking bids for electricity which, for many of them, is their biggest cost, he said. Thanks to the freshly minted business tax cuts, many companies will find their electric bill is higher than their tax bill, he predicted. Detroit Ed and Consumers, subsidiaries of DTE Energy and CMS Energy, respectively, continue to oppose any changes in the energy law. As far as customer choice, we feel its working the way it was intended to, DTE spokesman Scott Simons said Friday. While not getting into specifics, Wurfel refused to rule any topic off the energy table. Whether Michigan has sufficient transmission facilities and generation capacity certainly will be discussed, she said. This governor likes to look at all the components of the equation, to see where it all fits. Hes outlined a whole series of special messages he wants to give throughout the year. Were focused on infrastructure, where energy might come into play. Look for Snyder and his team to make some energy pronouncements in the fall, she added. Whether the state will seek siting authority over offshore wind development may or may not be among them. Scandia Wind, a Norwegian wind energy developer, has been stymied by several counties bordering Lake Michigan in its efforts to locate an ambitious 500-MW wind farm in the lake. Officials in those counties fear the sight of 400-foot-tall turbines a few miles off shore could hurt the local tourism trade. Last week, Grand Valley State University in Allendale, Michigan, issued a report on the benefits of and concerns about offshore wind, including public acceptance, visibility, noise and tourism. The study found, for example, that wind turbines in Lake Michigan most likely would be installed within view of the shore because water depths increase rapidly with distance, and that a wind farm located six miles offshore would be visible about 64% of the time based on average weather conditions. The report said potential advantages of offshore wind include

more consistent wind speeds, proximity to large cities and energy centers, and the ability to use larger and more efficient turbines. Earlier this year, a bill was introduced in the Legislature to ban offshore wind development in Michigans Great Lakes. However, H.B. 4499 remains bottled up in the Energy and Technology Committee in the House of Representatives. Any discussion about transmission and/or distribution could prove particularly timely. On Thursday, a failure of Detroits antiquated distribution system left about a quarter of the citys downtown, including the Coleman A. Young Municipal Center, without power. Detroit Ed supplies power to the states largest city, although the publicly owned Detroit Department of Public Lighting owns the local distribution system. Simons, whose company lent assistance to the city, said nearly 100% of the load had been restored by late Friday morning. Detroits problem is that its electric system is simply too old and they dont have any money to repair it, he said. In the past, Simons said, DTE has expressed an interest in acquiring the Detroit system, and the latest outage could revive those efforts. In an interview with a Detroit radio station Friday morning, Dave Bing, the citys mayor, said the electric system should be privatized. Bob Matyi