Michigan House passes clean energy plan, as session goes into early hours of the morning

LANSING — The state House narrowly passed a contentious clean energy plan Friday morning that opponents describe as a massive overreach and many proponents say falls short of what is needed to counter a rapidly heating planet.

The three clean energy bills moved closer to the desk of Gov. Gretchen Whitmer, who is expected to sign them, though two of the bills received late amendments in the House and must first return to the Senate.

Democrats said Senate Bills 271, 273, and 502 — which seek to accelerate Michigan's shift to wind, solar, and other clean energy sources — are a significant step forward in combating climate change and will also help historically disadvantaged cities such as Detroit, where large numbers of residents have been harmed by environmental pollution and live in older, drafty homes that are not energy-efficient.

Republicans said the bills are an overreach and predicted they will lead to higher electricity bills and less reliable supplies. And they complained the bills do nothing to improve accountability of Michigan's big utilities after frequent and lengthy power outages in recent months provoked public outcry.

The bills represent about one year's worth of consultation and negotiation and are an attempt to partly implement Whitmer's MI Healthy Climate Plan, unveiled last year. They have undergone significant revisions since they were first introduced. For example, the target for achieving 100% clean energy was moved back five years, from 2035 to 2040. Along the way, Michigan's two biggest utilities, DTE Energy and Consumers Energy, have become largely neutral on the bills.

The plans seek to leverage significant amounts of federal money currently available under the Inflation Reduction Act and the infrastructure law.

Lawmakers in the House spent hours in session Thursday and didn't vote on the package until past midnight. The bills passed by votes of 56-51, 56-52, and 56-52, respectively.

“Too many communities in my district have been impacted directly by climate change and decadeslong underinvestment in our infrastructure," said state Rep. Jennifer Hill, D-Marquette.

Republican lawmakers were uniform in opposition to the bills. State Rep. Bill Schuette, R-Midland, said "(t)his legislation will lead to higher rates and less reliability. And that’s a bad deal for Michigan.”

Republicans were unsuccessful in implementing a series of amendments for the bills. Democratic Rep. Dylan Wegela, D-Garden City, attempted to amend SB 271 to remove natural gas as a potential "clean" energy source under the bill's definition but was also unsuccessful.

The bills earlier passed the full Senate in another party-line vote, 20-18. The bills have strong backing from environmental groups but are opposed by many business groups, such as the Michigan Chamber.

Senate Bill 271

• Sets standards for renewable energy, as well as clean energy, which under the legislation can include not just hydro, wind and solar but nuclear energy, as well as natural gas and biomass projects, under certain circumstances.

• Requires electricity providers to achieve at least 15% renewable energy through 2029, 50% by 2030, and 60% in 2035 and beyond.

• Requires investor-owned utilities, whose rates are set by the Michigan Public Service Commission, to produce 80% of their energy from clean energy sources by 2035 and 100% by 2040 and beyond. Clean energy can include natural gas as long as at least 90% of associated carbon emissions are captured and stored.

• Municipal utilities must submit a plan to the MPSC by July 1, 2028, setting out how they will meet the clean energy standard. Co-ops and alternative energy suppliers must submit such plans a little sooner, by Jan. 1, 2028.

• Requires the MPSC, in setting rates, to determine both the utilities' costs and savings from complying with the clean energy legislation, and pass on both to customers.

• In one of the changes made late Friday, prompted by concerns about possible disruptions of electrical supply in Michigan's Upper Peninsula, requires the MPSC to submit a report by Dec. 1, 2024, setting out "the unique conditions influencing electric generation, transmission and demand" there, and options for compliance.

• Provides "off ramps" under which the MPSC can grant "good cause exemptions" of up to two years of meeting the requirements, should the reliability of supply be threatened.

• Increases the cap on "distributed generation" — systems such as rooftop solar panels that use electricity in the same place it is generated — to 10%, up from 1%.

• Requires all utilities to submit plans to construct or acquire energy storage systems by the end of 2029, to meet a combined energy storage target of at least 2,500 megawatts.

Senate Bill 502

• Changes the way the Michigan Public Service Commission assesses plans put forward by utilities, to include factors such as climate change, reduction of greenhouse gases, affordability, and how the plans would affect the health and welfare of people in economically disadvantaged communities where the living environment has already been harmed by environmental pollution.

• Increases the fees regulated utilities must pay when they ask for rate increases, with some of that extra money being used to fund grants to groups challenging proposed rate increases, with some preferences for groups representing disadvantaged consumers.

• Requires utilities to submit analyses that set out anticipated "environmental justice impacts" of any proposed new generation plant powered by natural gas.

• Requires the MPSC to consider use of union pay scales through "prevailing wage" policies when assessing proposed utility construction projects.

Senate Bill 273

• Starting in 2026, requires an electricity provider to improve efficiency by increasing energy waste reduction to 1.5% of retail electricity sales, up from 1% currently. For natural gas suppliers, the required efficiency rate would increase to .875%, up from .75%.

• Requires utilities to target more energy waste reduction programs in low-income areas, allowing those residents to save on their electric bills while at the same time reducing the utilities' need to increase their capacity.

• Requires utilities serving more than 50,000 customers to employ an energy waste reduction workforce that is diverse and to focus those hiring efforts on low-income areas and workers negatively impacted by factors such as the move away from internal combustion engines toward electric vehicles.

The House also approved Friday morning Senate Bill 519, which sets up a state agency intended to retrain and otherwise help workers negatively impacted by changes in the energy and automotive sectors.

Mike Alaimo, the Michigan Chamber's director of environmental and energy affairs, said in a Thursday news release the clean energy package threatens job providers “by severely limiting the resources our state can use to meet our energy needs over just a few years and giving state bureaucrats unprecedented power to shift costs onto energy customers."

Dr. Elizabeth Del Buono, executive director of Michigan Clinicians for Climate Action, said the package is "only an incremental step in the right direction and falls short of the emissions reduction targets necessary to offset the worst impacts of our changing climate."

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on X, formerly known as Twitter, @paulegan4.

This article originally appeared on Detroit Free Press: Michigan House Democrats approve clean energy package