Sep 10, 2007

Renewable Portfolio Standard needed to create demand for alternative energy

Renewable Portfolio Standards (RPS) and clean, alternative energy was a hot topic at Saturday's Michigan Policy Conference at the Lansing Center sponsored by the Michigan Prospect.

Renewable Portfolio Standards mandate a certain percentage of a power company’s supply to consumers be generated from renewable fuel sources. Many people believe this is an absolute necessity in moving alterative fuel sources – like wind power, solar energy and ethanol – forward and making it a viable industry in the state and easing the country’s dependence on foreign oil and energy.

“Twenty four states have an RPS law on the books,” said Mark Beyer, the Director of Marketing Communications and External Relations for NextEnergy. “They have sent a signal to the world they are in the game, and Michigan has sent a signal it is not.”

NextEnergy is a nonprofit corporation founded in 2002 with a $30 million seed grant from the Michigan Economic Development Corporation to implement an economic development strategy to accelerate research, development and manufacturing of alternative energy technologies and create jobs in Michigan.

RPS has not met with much success in the Legislature. RPS bills introduced in the House in early 2005 died in committee. Critics oppose the standard because it adds costs to utility bills. A pair of bills have been introduced in both the House and Senate in the current session. Rep. Robert Jones, D-Kalamazoo, introduced House Bill 4539 on March 28, and it was referred to the House Energy and Technology Committee where it remains. In the Senate, Sen. Roger Kahn, R-Saginaw, introduced Senate Bill 219 on Feb. 20, and it was referred to the Senate Committee on Energy Policy where it also remains.

The difference between the two bills is the House bill requires a larger percentage of renewable energy sources sooner than the Senate version. The House bill requires utility providers like DTE and Consumers Energy to provide 7 percent of their total energy sold to consumers be from renewable sources by Dec. 31, 2009, and that requirement grows to 20 percent by 2020. However, an analysis by the nonpartisan House Fiscal Agency estimates it will also increase utility bills by the same 7-20 percent margin.

The Senate bill requires only 7 percent of energy come from alternative sources with a deadline by 2015, and it allows the Michigan Public Service Commission (PSC) to exempt a provider from the requirements of its portfolio standard.

There are many things in the works to both save energy and to provide alternative energy. In Detroit, there is a move to use empty lots to grow food and push urban farming. Many homes are also using cisterns to catch runoff rain water to water lawns instead of using municipal water, and there is also a push to use solar powered shingles on roofs.

“In the old days when you hung your clothes out to dry it meant you were too poor to have a dryer,” Beyer said. “Now it means you’re smart enough to know it saves energy; my alternative energy was sunshine and a nice breeze.”

Although those are great ways to save energy, Beyer said they do not create many jobs, and that’s what NextEnergy wants to do. He hopes an RPS will create a demand so that entrepreneurs will meet that demand and create jobs. It’s also hoped Michigan will be a leader in providing alternative energy equipment, like manufacturing the equipment that provides wind power.

“There are all these great alternative sources,” he said. “The demand can be created, but we need the RPS to help.”

But proponents of renewable energy say all of these new sources will not completely erase the need and demand for fossil fuel sources, and it’s imperative that any new and existing generating plants be built safer and pollution free as much as possible.

“You cannot build enough wind farms or solar plants to provide enough energy for Michigan,” Beyer said. “You will still need the large plants that employee hundreds of workers, so you just need to build them right.”

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