By Jesse Berst
Just yesterday we reported how declining natural gas prices are putting coal plants and merchant generation under financial strain. We wondered if renewables would be next, since it is so hard for renewable energy to match the low cost of power from a natural gas plant. And now comes word that opposition is building in Michigan to the state's proposed renewable portfolio standard (RPS) of 25% by 2025. The Detroit News reports a coalition of labor, business and government has launched its opposition to the 25x25 ballot initiative.
Under the ballot proposal, the state's energy providers would have to produce or purchase 25% of their electricity from renewable sources, such as biomass, hydro, solar and wind power, by 2025. The opposition group says it will cost $10 billion to implement the RPS. "We are not opposed to renewable energy," spokeswoman Megan Brown told the Detroit News. "We are opposed to cementing it into the state's constitution. It limits flexibility for the future."
Washington, D.C.-based Clean Water Action, one of the groups backing the measure, says other states have used green energy without significantly raising costs. They told the paper they are confident the measure will gain enough signatures to be placed on the November ballot.
Michigan passed an RPS in 2008 that required 10% renewable energy by 2015. The new measure seems to put utilities between a rock and a hard place. On one hand, it mandates the 25% goal, which the state's two largest utilities, Jackson-based Consumers Energy and Detroit-based DTE Energy, say would cost $12 billion. On the other hand, it limits annual rate increases to recoup those costs to a maximum of 1% per year.
Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry's oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.
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