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Michigan Utilities Silence Clean Power Plan Criticisms

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Following the historic announcement of the EPA's final Clean Power Plan rule, friends of coal commenced their predictable negative chatter. In truth, the noise started well before the rule was even finalized as interest groups clamored to try to thwart the nation's first ever limits on carbon pollution from power plants. Luckily, some sanity remains in the state of Michigan where two of the largest utilities released statements saying they would not only work with the Clean Power Plan, but that they were already shifting to clean energy and are well positioned to meet the pollution reduction goal.

No Worry, No Cry

Some would think Consumers Energy and DTE, the state's two largest utilities closing a combined nine coal plants, would be the first to cry foul and play victim in Michigan, but this simply isn't the case.

Skiles Boyd, DTE's vice president of environmental management and resources, said the company is positioned to meet the EPA's new carbon regulations. According to Boyd, "DTE provided significant input throughout the rulemaking process." Boyd goes on to say, "We appreciate that the EPA recognized providing utilities with some additional time to meet the first compliance deadline would benefit customers and cushion the economic impact while still achieving the targeted environmental benefits."

Dan Bishop, a spokesman for Consumers Energy, similarly stated that the utility is "favorably positioned" to meet carbon emissions targets in the Clean Power Plan.

These utilities recognize the Clean Power Plan accelerates their own goals of cleaner, affordable, and reliable service for their customers and allows them to take the driver's seat in creating a plan. Other utilities that choose to "just say no" will conversely find themselves harmfully branded as clean energy opponents and required to follow a federally crafted plan. Noncompliance is not an option.

Rumor Roll Call

The statements from Michigan's utilities on their own deflate the negativity of cynics, but in an effort to clear the air, let us quickly dispel some of the most common negative claims.

Rumor: Meeting the rule is going to be expensive.

Four of the major resource options for electricity are coal, natural gas, renewables, and energy efficiency programs including measures such as air sealing, roof insulation, boiler replacement, and lighting installations. In 2014, Michigan used coal for 50% of its net electricity generation--much of it brought by rail from Wyoming and Montana. The Clean Power Plan would work to replace some of that coal with cleaner alternatives. Luckily, as states decide what combination of resources will best meet the energy needs of their homes, farms, and businesses, they will realize two options, renewables and energy efficiency, are comparable and even cheaper than coal. The graph below shows a side by side comparison of the most recent costs in the state as seen from a 2014 Michigan specific report by the Michigan Public Service Commission (MPSC). 

Michigan $/MWh

Rumor: Meeting the rule will sacrifice reliability.

Not true. My colleague John Moore recently posted a blog specifically rebutting all reliability concerns. Ways the plan will maintain or even enhance reliability include, but are not limited to:

  1. State carbon targets are phased in more slowly,
  2. States must consider reliability issues in developing compliance plans,
  3. Flexible, market-based compliance options - including interstate trading - mean that states can design plans around any  anticipated reliability issues, and
  4. A reliability provision lets states temporarily use a polluting power plant in extraordinary circumstances when needed to  maintain reliable service.

Rumor: Meeting the rule will kill the economy.

Renewables and energy efficiency boast a track record of helping the Michigan economy. According to the MPSC, the renewable energy standard, launched in 2008 through Public Act 295, is resulting in the development of new renewable capacity and can be credited with over 1,100 MW of new renewable energy projects becoming commercially operational since the standard took effect. The MPSC also estimates that $2.9 billion was invested in Michigan to bring new renewable energy projects online through 2014. Additionally, of the entire energy sector jobs (not just clean energy) in Michigan as of 2013, more than half, or 46,000, jobs are related to energy efficiency.

Moreover, an Environmental Entrepreneurs (E2) report shows that Michigan ranked fifth in the nation in clean energy and clean transportation job announcements in the first three months of 2015. This makes it the eighth time Michigan cracked the top 10 since E2 began its job-tracking analysis in 2011, continuing Michigan's stretch as one of the top-performing states in the country when it comes to clean energy jobs.

Rumor: The rule is outside of the EPA's authority.

This argument contradicts the structure of the Act and requires that the Court ignore clear language adopted in the 1990 Clean Air Act amendments. Though it's no surprise that polluters and their allies will challenge these clean air standards in court in an attempt to slow the process, constitutional challenges to previous Clean Air Act standards have yet to succeed.

More information can be found in a new fact sheet, and the odds strongly favor the EPA. With this in mind, it would be wise for states and utilities to follow in Michigan utilities' footsteps and begin preparing to implement the Clean Power Plan now and not wait for a final judicial decision.

Rumor: Meeting the rule will hurt low-income communities.

The rebuttal here is two-pronged. First, the Clean Power Plan is designed to meaningfully mitigate the effects of climate change that disproportionately affect low-income communities by lowering the amount of carbon contributing to climate change. Second, EPA is providing a Clean Energy Incentive Program (CEIP) that rewards states double credit for putting the most cost-effective resources directly in low-income communities from 2020 to 2021. Thus, the plan makes it particularly attractive to bring all of the energy and non-energy benefits of clean energy to low-income communities. That means lower energy bills, cleaner air, and healthier homes.

The Inevitable and Necessary Transition to Clean Energy

Many sensible utilities were well underway on the transition to a cleaner energy portfolio and reformed business model before the final rule was announced. The low cost of natural gas, renewables, and energy efficiency coupled with flat to decreasing load growth suggests the market alone is driving clean energy expansion. Thus, a clean, modernized energy future is inescapable. It's simply a question of how hard we want to fight the inevitable and how devastating we want the effects of climate change to get.

We are already witnessing sea levels rising, storms ravaging communities, heat and fires roasting families and forests, and both droughts and floods punishing homes. The United States, but also the world more broadly, must act on climate. The quality of life for our children and their children is on the line. Tell Governor Snyder, the Michigan Agency for Energy, and your legislators to say yes to the historic Clean Power Plan so we can proudly tell our grandkids we seized the opportunity to fight for the betterment of their economy, their security, and their health.

Author: 
Ariana Gonzalez, Natural Resources Defense Council
Date: 
Wednesday, August 12, 2015
News/Event: 
News
Tags: 
Michigan
Federal Policy
Categories: 
Regulations and Policies