Michigan Land Use Institute: Franz Halts His Renewables Pushback

The following story was written by Glenn Puit of the Michigan Land Use Institute
and published on March 16.

A northern Michigan legislator who often talked about repealing a Michigan law requiring that 10 percent of the state’s energy come from renewable sources tells me he will no longer pursue the matter.

Back in January, State Representative Ray Franz (R-Onekama) said during an interview with Interlochen Public Radio that he wanted to kill Michigan’s Renewable Portfolio Standard (RPS.)

The 2008 law mandates that utilities in the state draw 10 percent of their energy from renewables like wind, solar, biomass, and landfill gas by 2015. Compared to many other states, that is a fairly modest standard.

“I have talked to several of the new freshmen coming in,” the representative, who supports building nuclear power plants in northern Michigan, told IPR a few weeks after taking office. “The mandates are going to require a type of electricity generation that is actually twice as expensive as what we are using right now. It has a detrimental impact on, of course, the economy and jobs by driving up the cost of energy in this state. So they are willing to look at this issue and maybe address it down the road.”

But in my interview with Mr. Franz last month, he said that, since taking office, he’s been unable to generate support among his fellow legislators for repealing RPS. Our reporting also found some strong support for RPS—and disagreement with the representative about its effect on rates—within his own party.

“I had thought about it but it doesn’t appear like any of the people at the table on either side (are interested),” Mr. Franz said. “I think it’s a dead issue for the foreseeable future.”

That may be because electricity from some renewable energy sources in Michigan, particularly utility-scale wind turbines, are proving to be less expensive than power from new coal plants, and Michigan’s growing renewable energy manufacturing sector is producing significant numbers of new jobs.

One fellow Republican who supports the mandate is Republican Governor Rick Snyder, who campaigned on the issue last fall.

“I think they did a decent job on that law,” Snyder was quoted as saying in the Sault Ste. Marie Evening News. “I don’t think we need to do much here. The balancing act is we need to keep costs down, but we need to look at renewables. I don’t want to mess with that.”

Another prominent Republican, state Senator Howard Walker, (R-Traverse City) told GLBNS last month that he still supports the RPS, and takes issue with claims that renewables are too costly.

“I voted for it and I think that having a component of our energy comprised of renewable sources is a good thing,” Senator Walker said. “When people say that it (clean energy) is more expensive, I think they are partially right in that it’s more expensive than the electricity that they are getting now, but it’s about the same price as any new source of electricity in our state, even coal.

“If we were to develop a new coal plant—because of the new costs that would have to be spread across the board and because of the new technologies involved in making a coal plant more environmentally friendly and making it more efficient—the cost of electricity from a new coal plant is very comparable to the cost of electricity from a new turbine,” Mr. Walker added. “We should be developing new electric generation in Michigan so that if the costs are comparable, let’s make renewables a part of our energy generation mix.”

John Sarver, who recently retired from the Michigan Public Service Commission, concurs with Senator Walker.

“Having that diversified resource base is really smart,” Mr. Sarver told GLBNS. “It’s like having a diversified stock portfolio, which gives you something to try and know what your costs might be 15 or 20 years down the road, and it’s safe to assume the cost of fossil fuels are going up significantly. It’s a good policy.”

Franz’ claims about renewables causing job losses are also hard to prove. Lansing lawmakers passed the RPS in order to create new jobs, and did so after a number of studies, including one performed for the state in 2007, confirmed that the policy would do just that.

The study said that enacting an RPS would send a clear, strong signal that Michigan is a great place for clean-energy investors because it would show genuine commitment to industrial production of clean energy components.

“Simply put, if an investor seeks to invest in renewable energy development in a state, one of the very first things he/she looks for is whether or not the state has a RPS,” the study stated. “If the state has a RPS, then the state obviously is committed to the investor’s industry. If the state doesn’t have a RPS, then the state just as obviously is not committed to the investor’s industry.”

For a look at some of the jobs payoffs that have come to pass in Michigan since RPS was enacted, some due to RPS and some due to the Granholm administration’s vigorous recruiting efforts, see our coverage of Michigan’s emerging solar industry, Crain Business News’ coverage of the growth of wind energy components manufacturing in the state, and a local TV station’s coverage of the rollout of what is now the world’s largest, most efficient wind turbine, built in Saginaw for Northern Power Systems.

One of the massive, 2.2-megawatt turbines is now in service near Cadillac, at the Stony Corners wind farm.

Glenn Puit is a policy specialist for the Michigan Land Use Institute. Reach him at glenn(AT)mlui.org.