Michigan Republicans have long been known for as being ultra-friendly to our major utility companies. The most recent evidence of that comes from legislation that will end what’s known as “net metering”. With net metering, homeowners who install solar installations that produce more energy than they use can send the bonus electricity back to the grid and receive a credit on their bill. When they don’t generate enough electricity for their own use, they can cash in the credit.
New legislation – Senate bill 438 – would force these homeowners to purchase ALL of their electricity from the local utility at retail prices. Any electricity they produce themselves they could sell back to the utility. However, and here’s the rub, they could only sell it at the wholesale price, not the retail price they are forced to pay for their electricty. The net impact is that the time to recover your costs for installing the solar panels would essentially double. An installation that would normally have a ten-year payback under net metering would, for example, take 20 years to pay off if the new legislation becomes law.
This incredibly long and complicated bill (it’s 82 pages long with an unusually long 13-page summary) does a lot of other things, too, most of which are gifts to the natural gas industry. One thing it does is to change the name of the law that governs these sorts of things from the “Clean, Renewable, and Efficient Energy Act” to the “Clean and Efficient Energy Act”. In other words, it does away with any effort to push for renewable energy. In fact, one of the other things it does is to remove the requirements on the Public Service Commission that oversees the utility sector to engage in any efforts to promote renewable energy sources or even conservation of energy. They would no longer be required to:
- Promote energy efficiency and conservation.
- Actively pursue increasing public awareness of energy conservation and efficiency.
- Actively engage in energy conservation and efficiency efforts with providers.
- Engage in regional efforts to reduce demand for energy through conservation and efficiency.
- Submit to the Legislature an annual report on the effort to implement energy conservation and efficiency programs or measures.
Poof! Just like that, renewable energy and energy conservation are no longer promoted by the regulatory body that regulates our energy utility companies.
The underlying effort here is to ensure that any non-fossil fuel derived energy is the domain only of the large utilities themselves. They do NOT, under any circumstances, want ordinary Michiganders to be in the energy business. The corporate front group Citizens for Michigan’s Energy Future is promoting this bill extensively. During a rally at the Capitol Building yesterday urging lawmakers to strip the net metering language from the bill, CMEF drove around a huge billboard with the words “Solar without subsidies” on it. They also tout a recent report showing that large solar installations – like the one large utilities can afford to build that CMEF calls “utility-scale solar” – are more efficient than small installations on people’s homes. This is, of course, completely irrelevant.
Here’s how greedy these large utilities have become: there are fewer than 2,000 Michigan utility customers who actually use net metering. That’s out of the literally millions of customers they have. But they still want to ensure nobody is incentivized to install solar panels. They want every cent of your energy dollars they can get and they don’t want any pesky homeowners honing in their profits.
Republican Senator John Proos, the sponsor of the legislation, issued a statement that has the familiar “choosing winners and losers” rhetoric the GOP is so fond of:
I don’t think the Legislature should be involved in picking winners and losers. Instead we should establish the goal of having cleaner sources of electric generation that reduce emissions, and then let the process determine which options best meet our needs. Michigan ratepayers have helped prime the pump for these new technologies since 2008. Now it’s time for them to compete head-to-head.
Obviously killing off net metering DOES pick winners and losers. By making home solar installations unaffordable, it drives homeowners out of the market leaving it the exclusive domain of the big utilities.
If the legislation become law, it may well have a negative impact our state’s economy, as well:
As with other states in the Midwest, utilities here say they are concerned about customers with rooftop solar benefiting from the grid while paying less than other ratepayers.
However, [Midwest energy analyst for the Union of Concerned Scientists Sam] Gomberg said the policy fails to credit the additional benefits rooftop solar provides to the grid, such as reduced emissions and less demand for new generation. New research shows that net-metering policies that offer fair credit to customers and take into account these additional benefits are driving the industry’s growth nationwide.
“Capping the reimbursement price at the wholesale price just ignores all those benefits,” Gomberg said. “It’s not a price that’s going to motivate people to make the numbers work for a smaller type system.
“That type of policy is one of the things in the bills that is a blatant giveaway to utilities that want to put the brakes on this movement so they figure out how to make a bunch of money,” Gomberg said. “It’s really going to kill a small but growing solar industry in Michigan. It’s really going to position Michigan to lag behind most states.”
But, hey, at least Big Energy will continue to reap all the profits it can, even it if it’s from less than 2,000 Michigan homeowners.
The Senate Energy and Technology Committee held a hearing yesterday but did not take a vote on the bill.
[CC photo credit: WayneNF | Flickr]