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Snyder's New Energy Czar Taking the Long View

Brader says environmental, economic sustainability are top goals

October 12, 2011 | By Jim Dulzo
Great Lakes Bulletin News Service

  Valerie Brader’s work on energy issues began with the Harvard Electricity Policy Group.

It is hard to think of an issue more crucial to restoring Michigan’s economy than making sure the state is completely on top of its energy game.

Fossil fuels costs are rising. States and countries are competing fiercely to lead the gigantic, global shift toward producing clean, renewable energy. And Michigan, with its unparalleled manufacturing heritage, must be a leader to regain its legendary industrial prosperity.

So why, then, did the Snyder administration name a brownfield redevelopment expert as the Michigan Economic Development Corporation’s energy policy leader? Pick any part of the energy puzzle the world is figuring out—efficiency, renewables, utility business models, peak coal, smart grids—and there’s more going on than one person can absorb.

But, it turns out, MEDC Chief Energy Policy Officer Valerie Brader has long been involved in energy issues. The Harvard law graduate and Ann Arbor resident’s first college job was proofreading for the Harvard Electricity Policy Group. Her former clients included companies in Michigan’s advanced battery industry, non-profits that worked on energy efficiency issues, and firms affected by Federal Energy Regulatory Commission rulings.

In one of her first press interviews since starting her new job, on Sept. 12, Ms. Brader sounded confident that, although Governor Snyder has made few public pronouncements about Michigan’s clean energy manufacturing sector, he views it as crucial to the state’s future.

Great Lakes Bulletin News Service: We have not heard much from the governor about energy policy yet. Why did you take this job?

Valerie Brader: If you interested in energy, you realize that the decisions we make now will really determine energy rates in ten to 15 years. This governor is focused on long-term economic stability for Michigan and, when it comes to energy policy, you are not going to find someone with a longer-term view than him. That is why I was so thrilled to join his administration.

What we decide to build or not build now will determine what we pay for infrastructure, for fuels in the future, and what our energy will cost.

GLBNS: So are price and cost going to be your primary concerns?

Ms. Brader: You know, we are now heading into a winter season with a lot of unemployed people who are going to have a hard time paying their heating bills. So price is very important. But other things are also important: Environmental protection is obviously key.

What is most important is both economic and environmental sustainability. Sustainability defined that way—because people use the word in a lot of different ways—is the number one issue. If you are working on energy issues, you’d better recognize that having only one of those—economics or environment—means that you won’t have the other. They are very interrelated.

GLBNS: What did you think of the Granholm administration’s approach to recruiting clean energy manufacturers? Did you pay much attention?

Ms. Brader: I was involved in trying to get some of my clients to bring business to Michigan, so I was definitely involved in those kinds of efforts.

As someone who talks to companies about the tax structure they have if they move here, I can say that having a structure that is explicable is very important. Whatever you want to say about the business tax structure we’ve had, it definitely was not an explicable one.

It is very hard to talk to a client who’s thinking about locating here unless you are able to say, here is what you rate is. We had to say, well, it depends. There’s this surcharge, there’s these other things. So it was very difficult to attract a company when the tax policy was not understandable.

To be honest, we were not able to do that during the previous administration. A lot of companies did come, looking for the kind of relief that administration’s targeted tax incentives offered, but others chose not come. I do think we would have done better using this new approach.

[Editor’s note: Michigan’s new, simplified corporate tax regime takes effect on January 1.]

I do believe that this governor has a better way of doing this. I’m far more comfortable with his method. You know, everyone in this state agrees we need to grow our job base. But we have run out of easy decisions.

GLBNS: What do you think of requiring utilities to provide more renewable energy? Does Governor Snyder support that?

Ms. Brader: Well, I know that the governor said during his campaign that he supported the current renewable portfolio standard. But, you know, the Legislature is now holding hearings on that law, so this is not a good time to comment further. I don’t want to re-characterize what’s already been said.

GLBNS: Did you see DTE Energy’s recent announcement about the cost of  electricity from a new wind farm?

Yes, I did see that it came in a lot lower than expected, and that’s always a good thing.

GLBNS: How does the governor feel about public/private partnerships and tax assistance to companies trying to commercialize new clean energy manufacturing processes—which some call ‘picking winners’?

Ms. Brader: He is very supportive of university and private research. They just had some great grants come in through the federal government to the University of Michigan. He’s a very strong advocate of Michigan research in energy--and other research, too.

On picking winners: that is more about tax incentives. You are not going to see this governor decide that this one sector gets a tax break and that others will not.

Many people will tell you that, under the old system [tax incentives or write-offs], companies got the biggest payoffs when their new project was already well established.

Now, hopefully, you will make a big profit if your new venture goes well. But, under the old system, that’s when you got your tax reward, rather than getting help when you were just starting up.

[The cash grants MEDC now gives start-up projects] are smaller than what a tax reduction at the end used to be. But it comes when you actually need it, rather than getting a larger one when you don’t really need it anymore. And this new approach costs the state less.

GLBNS: How do you see your day-to-day work unfolding once you’ve gotten over the big learning curve you’re facing?

Ms. Brader: That curve will continue for a while! I expect to spend part of every day learning about new things and working with businesses that have energy needs or innovative ideas.

I’ll spend a lot of time meeting with people, searching for ways that we can help them in the best way.

One thing is to make sure we have all of the voices in the room. That is when you get the best thinking.

You know, Michigan people are very innovative. With all that the state has gone through, we’ve lost the sense that this is us, that we are innovative. The auto industry was built on innovation, and so were others. So the more voices and the more perspective, the more solutions will come up.

GLBNS: Are you aware of the Wind Working Group? I know they meet a lot, but it is not clear to me what they accomplish.

Ms. Brader: That is a group our office has been involved with, and we will continue to do that.

In terms of renewables sited because of the mandates, we’ve seen a lot of wind get sited. So I would challenge anyone who says that’s been unsuccessful. They’ve got it off and running in the past three years. The wind group has worked hard and had good successes.

The Wind Working Group has a lot of people who are consultants who really know wind well and participate quite heavily. That is the kind of knowhow that gets spread around at their meetings. Groups like that have an inherent value, so I would have to give them some of the credit for the wind development going up around the state. The group helps raise the overall knowledge base.

GLBNS: Do you know much about feed-in tariffs, and is that something the administration is interested in?

Ms. Brader: I’ve read a lot about it. I do know that we have done a lot less solar than wind development, which is somewhat to be expected because, after all, we are a windy state. I do understand that feed-in tariffs have been used in a lot of different contexts, not just for solar, elsewhere. We do not have a position on them right now. We want to learn more first.

GLBNS: So, what is the governor’s long-term vision for Michigan’s energy future?

Ms. Brader: The governor wants an energy policy that is sustainable, as I said before, both economically and environmentally. He wants a policy that supports homeowners and business and that also protects our environment. He also understands that decisions that are made right now will determine environmental and economic impacts and costs for a long time to come.

So, it is important to be thoughtful and to get those decisions right. We’ll be living with them for a long time. We are doing that right now with decisions from 40 or 50 years ago.

Making decisions for the long term is inherently very difficult, because the decisions are also political decisions. But long-term is what he is focusing on.

Jim Dulzo is the Michigan Land Use Institute’s managing editor. Reach him at jimdulzo@mlui.org.

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