Posters filled with pie charts and graphs lined the room at the Detroit Electrical Industry Training Center in Warren last month as Michigan Gov. Rick Snyder stepped in front of a small crowd to deliver his special message, “Ensuring Affordable, Reliable, and Environmentally Protective Energy for Michigan’s Future.”
As Snyder pointed out in his message, Michiganders use 38 percent more energy than the national average. His plan focuses on four key areas: affordability, reliability, adaptability and protection of the environment. Other key points of the speech were eliminating energy waste and an increase in reliance on natural gas and renewables.
Media coverage following the special message repeatedly honed in on one stat: the governor’s call for up to 40 percent “clean energy” by 2025. According to the plan, Michigan has the potential to meet up to 40 percent of its energy needs through a combination of natural gas, renewable energy and reducing energy waste through efficiency efforts.
But all of the plan’s details can be a lot for a Michigander to take in.
To help, we’re breaking down those four pillars of the governor’s special message — affordability, reliability, adaptability and protection of the environment — and sharing with Smart Energy readers what the new 10-year energy plans means for you.
Affordability
- In 2009, Michiganders used more energy — heating plus electricity — than the national average.
- Our average bills, however, were only 6 percent above national average. Why? Our natural gas price is one of the 10 lowest in the country.
What does it mean for Michiganders?
We’re wasting large amounts of energy at homes and businesses. Older homes, outdated commercial infrastructure and Michigan’s extreme climate provide ample opportunity for above average waste.
With at least nine Michigan coal power plants expected to retire in coming years and new federal regulations on carbon emissions, an energy shortage is looming. Additionally, the average U.S. household will see its electric costs increase in 2015, according to the U.S. Energy Information Administration.
If costs for energy continue to rise or energy becomes in short supply, Michiganders will see their above average usage push their spending far beyond 6 percent.
How can Michiganders meet the governor’s goal to eliminate energy waste?
- Maximize insulation and fill in tiny cracks and holes (air seal) wherever possible, such as basements, crawlspaces and around doors and windows.
- Replace appliances (such as refrigerators, air conditioners and furnaces) that are more than 10 years old with ENERGY STAR® qualified equipment.
- Get rid of unused electronics and unplug devices when not in use (such as phone chargers and game consoles).
- Install LED lighting and upgrade seals and ECM motors on freezers and refrigerators for businesses.
- Replace older industrial equipment with newer technologies that increase efficiencies.
Michigan’s previous efforts to reduce energy waste across the state have created $2.5 billion in savings for Michiganders, according to the governor’s office, and Snyder believes that number can be doubled.
Reliability
- In 2011, the average number of power outages a year per customer was 1.13.
- In the wake of crippling outages in 2013 and 2014, the Michigan Public Service Commission has aggressively worked with utilities to prevent power outages across the state and ensure timely and thorough response in the event of unavoidable outages. MPSC ordered utilities to trim trees near power lines, provide the state with detailed explanation and justification when outages occur and make it easier for customers to receive credit on their utility bills when outages do happen.
- The average number of power outages a year per customer is 0.8 today — meaning fewer Michiganders will experience a sustained outage this year.
What does it mean for Michiganders?
- Proactive, preventative measures (such as tree trimming) will help continue to make the delivery of power more reliable.
- But Snyder thinks the deployment of smart meters “might be the best thing we ever do for reliability.” Smart meters manually collect data and can provide instant reporting of power outages and other issues to utilities, resulting in quicker response time for consumers. For most people, the cost impact of smart meter deployment is yet to be seen or understood. Who pays for a new smart meter — the utility or the homeowner? Regardless, the ability of smart meters to offer detailed billing breakdowns to recognize and eliminate energy waste could outweigh any costs passed on to consumers.
How is Michigan ensuring the reliability of our energy supply in the future?
Smart meters and tree trimming can have an immediate impact on Michiganders’ power needs on a day-to-day basis, but what would happen if there just wasn’t enough energy to go around?
The Upper Peninsula is already facing energy shortages while grappling with the future of a critical coal plant in the region. Soon, Michiganders living in the Lower Peninsula could face their own energy shortfall, according to regional transmission organization Midwest Independent System Operator (MISO). In 2016, Michigan won’t have the 15 percent reserve capacity MISO recommends and the Lower Peninsula faces a three gigawatt shortfall of generation that can be called on to keep the grid from failing. Snyder still believes a long-term solution for the Upper Peninsula’s current power crisis will be in place this year via a shift in the contracts of services, but the shortage problem is set to hit the Lower Peninsula in a “big way.”
“Michigan’s risk of devastating outages is serious and growing. No large-scale grid operator in the country has a more serious risk than MISO, and no place in MISO has a shortage nearly as big as Michigan’s,” Snyder said in his message, and pointed to adapting the structure of our energy market to provide long-term solutions.
Adaptability
- Michigan is heavily reliant on coal, with 59 percent of the state’s energy usage coming from coal plants. The remainder is made of natural gas at 14 percent, nuclear at 18 percent and renewable at 9 percent.
- “Michigan must set a reasonable, achievable and efficient goal for 2025: a minimum of 30 percent clean energy — and potentially much more,” said Snyder.
What does it mean for Michiganders?
Michiganders will see a shift in energy market structure, with less reliance on coal, however, the main source of renewable energy is yet-to-be determined, as several factors impact the cost of renewable energy options.
- Wind and solar energy will likely be less expensive than coal or natural gas, according to Snyder, but wind and solar can’t meet baseload (24 hours a day) demand, since both are dependent on weather conditions.
- A new source of baseload generation could be natural gas, which Snyder heavily pushed in his message. Michigan currently has the eighth-lowest natural gas price in the country, but natural gas prices are often volatile, making natural gas an uncertain source of affordable power.
- Reducing energy waste and demand also plays a big part in ensuring a reliable energy future.
Depending on cost in 2025, Snyder proposes an energy market structure of 43 percent coal, 26 percent natural gas, 20 percent nuclear and 11 percent renewable. If natural gas prices spike or wind or solar prices fall, the governor proposes 43 percent coal reliance, 13 percent natural gas reliance, 20 percent nuclear reliance and 24 percent renewable reliance.
Protecting the Environment
- Michigan’s reliance on coal has had documented negative effects on health and the environment, ranging from mercury-laden fish in our rivers to asthma attack-inducing particulate matter in the air.
- Snyder’s recommendations to reduce energy waste and shift to renewables and natural gas are, in part, to help control these pollutants.
What does it mean for Michiganders?
In addition to shifting Michigan’s energy market structure, Michiganders may see a heavier reliance on advanced transportation fuels such as natural gas, biofuels, hydrogen and electricity, but there appears to be a greater public focus on one of the shortest sections of the special message — hydraulic fracturing and drilling for natural gas and oil.
The governor’s message was particularly vague as it relates to “protective and effective regulation of drilling for natural gas and oil.” Drilling on private land, particularly in Metro Detroit, has been highly contentious in recent years, when new technologies allowed energy companies to find oil and natural gas in new places around Michigan, a point not touched on in the speech.
Michigan has also taken steps to require more preparatory work and monitoring of water levels at hydraulic fracturing sites, according to Snyder, and the public will have more information about when and where hydraulic fracturing is used via the FracFocus Chemical Disclosure Registry. For some, however, the requirements aren’t enough. In addition to ongoing criticism of hydraulic fracturing —also known as fracking —by environmental groups, the Committee to Ban Fracking is seeking to collect the necessary 250,000 signatures to bring a ban on hydraulic fracturing in front of voters in 2016.
Michigan’s energy future relies on reducing energy waste
Snyder proposed an extensive agenda with ambitious goals for Michigan.
While many Michiganders care about drilling, fracking and a transition to renewable energy, one key theme for all Michiganders is the importance of reducing energy waste. By making small daily changes — and in some cases, larger investments — we can increase energy efficiency at our homes and businesses. We can bring down our energy costs, reduce our energy usage and reduce strain on the grid. For Michiganders, eliminating energy waste is an immediate and tangible solution we can each undertake.
After all, the cleanest energy is the energy you never have to create.
The harder questions to answer are whether or not Michigan will make its way from the bottom to the middle of the pack in energy usage — especially without controversial mandates — or if the state could even surge ahead to position itself as a leader in energy efficiency. Only time will tell if the governor’s policy is the answer to our energy questions.
Learn more on the governor’s energy and environmental priorities.
