Regulatory actions by the U.S. Environmental Protection Agency (EPA) and challenges to the EPA’s latest action have injected tremendous uncertainty into energy markets nationwide. In response, dozens of plant closures have already been announced, including nine in Michigan.

Despite billions of dollars spent by Michigan energy providers on advanced air and environmental emissions technology, customers in our state now face the prospect of higher energy rates in order to comply with Washington’s latest “we-know-best” crusade.

At the same time, our state energy laws need updating. We introduced Senate Bills 437 and 438 in July to begin that process.

Our goal — my and Sen. Mike Nofs, R-Battle Creek, chair of the Energy and Technology Committee — is to craft a next generation energy policy that provides maximum flexibility to ensure the availability of clean, reliable and competitively priced energy for all Michigan customers and allows Michigan, not Washington or out-of-state special interests, to control our energy future.

Our legislation is a work-in-progress that represents a starting point for discussions in the Senate Energy and Technology Committee. Many of the items in the bills come directly from a 37-member workgroup — made up of business, utility, environmental, consumer and state regulatory stakeholders — that met during the past year.

One of our key objectives is to encourage more competitive rates for Michigan customers. We regularly hear from residents and business owners alike that their utility bills are too high, especially when compared to neighboring states.

That is why we propose eliminating mandates and surcharges that skew the market and provide special, government-chosen treatment for certain technologies. The rationale in 2008 was that renewables and energy efficiency were just getting off the ground. These resources have shown positive value to the state and should remain an important part of Michigan’s energy mix. The question now is whether ongoing ratepayer subsidies are necessary.

We do not believe the government should be in the business of picking winners and losers. Instead, we support an “all-the-above” approach that gives our state flexibility to determine the proper mix of generation resources that are most affordable for families and businesses.

Our plan for a revamped, Integrated Resource Planning Process will bring all energy market participants, including renewable energy producers, to the table with the Michigan Public Service Commission to determine the best, most cost-effective manner to meet our current and future energy needs and goals.

Customers will also be able to buy a portion of their power from renewable resources through voluntary green pricing programs that each utility would be required to offer.

Our legislation also addresses the issue of “net metering,” whereby customers who generate all or part of their own electricity are able to sell excess generation back to the utility. The bills increase the amount of energy a net-metering customer can generate and lower the upfront cost, two positive steps to encourage more consumers to participate.

Two challenges that we are trying to meet in a new energy plan are keeping consumer costs down and treating all ratepayers fairly. Net-metering customers still utilize the energy grid to both receive power and send their excess power to the utility. It’s only fair that they should share in the cost of maintaining the electrical grid, or these costs will end up being shifted to their neighbors and other customers.

We believe in customer choice. Our legislation maintains Michigan’s current 10 percent cap on the amount of a utility’s electric load that can be served by the choice market. We do propose a few changes to ensure that all providers are doing the necessary long-term planning to account for their customer needs while also contributing to Michigan’s capacity and reserve margin requirements — costs that are currently subsidized by utility customers.

There is plenty of work ahead, yet we feel Senate Bills 437 and 438 represent an excellent first step in crafting a balanced energy policy that provides for increased fairness, adaptability, reliability and competitively priced clean energy.

We look forward to the discussions and deliberations as we move through the process of enacting Michigan’s next generation energy policy. Most importantly, we — not Washington or out-of-state special interests — will control our own energy future.

 

Sen. John Proos, R-St. Joseph, is the committee’s vice chair and represents Michigan’s 21st District. Together they have more than 19 years of experience in developing state energy policy.