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‘Energy Freedom’ Bills: Time to Unlock Homemade Power in Michigan

Bipartisan backing hints at possible shift toward renewables

Clean Energy | July 29, 2014 | By Jim Dulzo

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Jim Dulzo is the Michigan Land Use Institute’s senior energy policy adviser. Reach him atjimdulzo@mlui.org.
 

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The Energy Freedom bills would facilitate more, and more profitable, renewable energy development by Michigan’s farmers.
The Energy Freedom bills would facilitate more, and more profitable, renewable energy development by Michigan’s farmers.

Dairy farmer John Jorasz may have the largest solar panel array in the Upper Peninsula, but it’s not big enough to suit his 200-cow operation.

On a bright day, his 200 panels installed late last year crank out 20 kilowatts of clean electricity. But his farm’s equipment uses more juice than that.  

Jorasz would like to install more panels, but Michigan’s net metering laws, which require utilities to credit customers at retail rates for their panels’ power, largely limit systems to 20 kilowatts. So Jorasz would receive little additional credit for expanding his system.

But stirrings in Lansing indicate that, in the future, Jorasz may be able to take better advantage of the sunshine, the wind, and even his cows’ manure to power his operation.

A bipartisan group of state representatives has introduced four bills, known as the Energy Freedom package. They would allow Jorasz and his neighbors to invest more in solar, wind, or methane-powered generation; reap a better return; and share credit for the electricity they produce.

Different combinations of 12 Democrats and five Republicans are sponsoring different parts of the package, marking a shift in the Michigan Legislature. The few energy discussions that occurred there in recent years mostly centered on efforts by several very conservative Republicans to roll back renewables.

Many factors drive the shift: 2013’s favorable Snyder administration report on renewables; the state’s annual reports on the renewable mandate’s success; polls confirming renewables’ soaring popularity; the nationwide rooftop solar boom currently bypassing Michigan; and some lawmakers’ realization that Jorasz’ dilemma is neither rare nor fair.

Aiding the shift are several conservative groups; the Christian Coalition of Michigan and the new Michigan Conservative Energy Forum endorse Energy Freedom, reflecting broadening support for renewables in places most pols wouldn’t expect. The groups, which are participating in a state Senate working group about next steps for renewables in Michigan, say they want solutions, not ideological debates.

“For too long, it’s been too partisan in nature,” said Keith den Hollander, chair of CCM. “If you’re a Republican, you’re supposed to stand only for drilling and fracking, and if you’re a Democrat, only for green forms of energy… and ‘ne’er the twain shall meet.’”

Larry Ward, founder and current director of MCEF, echoed that sentiment.

“This is about de-politicizing the issue,” Ward said of the work his group is doing, which includes recent polling confirming renewables’ popularity in Michigan and studies finding more renewables and more energy efficiency would boost the state’s economy. “They’re hearing more about solar panels, about problems with coal. It means more people are getting more used to the idea.”

Ward said his own experience with solar partly prompted MCEF’s involvement.

“I looked at solar for my home,” he said, “and looked at DTE Energy’s rules, and was amazed at some of the restrictions. If their service goes down, you can’t use your own power from your own panels. I know there used to be a safety concern, but technology has solved that.”

Technology—aided by exploding domestic solar markets, including in several of Michigan’s adjacent, similarly cloudy states—has also reduced sun power’s cost. But state regulations and utility resistance to small-scale, customer-owned generation means Michigan lags badly—frustrating businesses like Jorasz’, which could use a lot of solar.

State Rep. Ed McBroom (R-Norway), a U.P. dairy farmer who represents Jorasz’ district, says that is why he’s lead sponsor of the net metering proposal.

“If someone takes initiative to generate their own power, free some of their ties to utilities, and take the rates that come their way, then ‘freedom’ is an appropriate name for these bills,” he declared. “Allowing users to get a fair price back for their trouble when they are not using the power is a good thing.”

More and Bigger Systems, Fairer Pay

McBroom’s bill, HB 5673, Net Metering Enhancement, would lift net metering limits on the number and size of systems, including solar panels, wind turbines, and methane digesters. The bill also standardizes application forms and technical requirements, and maintains crucial protections for utility line workers.

“I talk to a lot of folks who see potential to generate power on their own farms,” he said. “They support a fairer system when it coms to net metering.”

McBroom said many constituents are skeptical of what they see as subsidies for renewables development, but “if you can get a fair price for your trouble, then the need for subsidization falls to the wayside.”

That assertion shapes HB 5676, Fair Value Pricing, sponsored by Rep. Jeff Irwin (D-Ann Arbor). His bill would require utilities to pay for electricity from customer-built, distributed power systems using either current retail rates or one determined by experts. Those experts would include utility and state officials, who would evaluate many factors such as utility savings on costs of new power plants, transmission and distribution lines, line loss, and environmental compliance. The bill prescribes biennial rate updates, 20-year contracts, credits of up to 120 percent of customers’ bills, and annual cash payoffs for unused credits.

“The bill sets a fair price for the type of energy you are putting online,” Rep. Irwin said. “When you put solar online, it’s during the day, so its production matches customers’ overall use and demand. That, along with not requiring any more transmission lines, makes it more valuable. It is similar to what other states have done with the value of solar.

“But,” he emphasized, “it’s not limited to solar. We tried to include anything Michigan currently defines as 'renewable' as an opportunity.”

More Teamwork, More Independence

House Bill 5674, Community Renewable Energy Gardens, sponsored by state Rep. Rob VerHeulen (R-Walker), stretches those opportunities. Inspired by Cherryland Electric Cooperative’s successful community solar garden project, the bill would guide similar efforts by customers to invest in, build, and share the credits jointly from their own renewable systems on a net metered basis, and requires utilities to purchase the power.

Rep. VerHeulen said that while “Cherryland and Traverse City Light & Power [which joined the project] figured out how to do this on their own, it might be easier to do with this legislation because it provides a clear roadmap. We think there will be a lot more interest in such projects if the regulatory environment for it is there.”

One renewables challenge many utilities think about is whether their grids can handle solar and wind power’s many ups and downs, and weather-related outages. The fourth freedom bill, HB 5675, Microgrid, sponsored by Rep. Jon Switalski (D-Warren) begins addressing those concerns.

“If we want to give individuals the choice to produce their own energy and sell it back to the utility, we need to update our infrastructure significantly,” Rep. Switalski said. “We talked to scientists and academics who thought expanding opportunities for microgrids was a step in the right direction.”

Microgrids are “smart”—interacting with whatever they connect to—and small, often supplying a single building but able to “island” themselves off from the big grid during power failures. The bill allows critical public facilities, such as hospitals, to use microgrids so they can employ their own emergency generators without harming utility workers repairing nearby power lines. It also requires MPSC staff to evaluate grid reliability and recommend steps to improve them.

What’s Next

None of the representatives would predict when Energy Freedom might get its first hearing by the House Energy and Technology Committee, and whether it could garner enough votes to pass.

But with the Snyder administration preparing to act on energy policy, they want to inject their ideas into the likely vigorous debate.

“I came to Lansing wanting to work on energy policy,” Irwin said, “especially the opportunities Michigan has to generate our own clean power and derive that economic benefit. When I arrived in the middle of such a huge Republican majority, I started thinking, what are some ways my more conservative colleagues can sink their teeth into this?

“There’s a lot of money to be made here,” he continued. “So maybe there are ways to eliminate regulatory barriers that prevent the generation of clean energy, let people realize the economic value of their land by generating power for themselves and their neighbors.”

DTE Energy has not commented on the package, but Consumers Energy spokesman Dan Bishop told Midwestern Energy News last week that his company’s “overall concern … [is] that it may force our existing customers to subsidize those customers seeking net metering contracts.”

That is the position both utilities took during last winter’s Solar Working Group process, rejecting accumulating research that suggests distributed solar is uniquely valuable to their operations.

Irwin is skeptical of utility claims that solar, especially customer-owned, is too expensive or forces other customers to subsidize them.

He agrees that the current utility business model stems from state regulations, so governments must make new rules allowing utilities to thrive as new technology changes their ways of doing business.

“What we are trying to do is put more competition and less regulation into the electricity market with the hope that it will give turbines, solar panels, methane digesters a more level playing field,” he said. “That allows us to generate value here, not in Wyoming’s coalfields.”

He pointed out that past utility warnings about renewables’ costs and possible harm to grid stability did not pan out.

“Let’s run the numbers and see the effect on consumers,” Irwin said. “You’ll see they are overplaying their hand on prices, just like they did with the renewables standard in 2008. We’ve found that renewable energy is very competitive and sometimes cheaper. They had no problem meeting those standards, but here we are with the same arguments all over again. I just hope that some of these ideas will be used.”   

So is John Jorasz, who said his big move on solar turned a lot of his farming neighbors’ heads.

“Nearly everybody I talk to is pretty excited about doing something, but they want to do something that is more beneficial for them than this piecemeal approach,” he said.

Jim Dulzo is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at jimdulzo@mlui.org.

4 Comments

860 days ago, 8:06pm | by Chuck Cubbage | Report Comment

This is great news - and bipartisan at that! Thanks for all the efforts :>)

859 days ago, 9:19am | by Gretchen Zuiderveen | Report Comment

This is the most hopeful, exciting, and forward thinking action that I've read about from our MI legislators in a long time. Don't grow weary, keep going in this direction, and thank you very much!!!

852 days ago, 9:28am | by Mark Hagerty - Michigan Solar Solutions | Report Comment

It is great these items are bipartisan. They should be. We all win from a more secure grid. We have many customers who will never have another electric bill that has an amount due. While we have others that, because of Michigan's limit on net metering (20kW), they can only offset a part of their load. The utility companies have placed road blocks wherever they can. Currently they insist we have to bring the power into the customers fusebox. We should be able to bring it into the customers side of the meter. If your fusebox is full, this could save you well over a thousand dollars and allow us to complete our work without entering the home.

849 days ago, 12:40pm | by Pat McGann-Zionts | Report Comment

I have a few solar panels on my OLD house -- But I NEED MORE to RE-DIRECT into my kitchen that has NO HEAT SOURCE except for my bay window on the south side of house. . .. I have to use a free-standing heater, OR, plan my baking on a COLD, WINTER'S DAY . .. I'M GONNA CHECK THIS OUT . .

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