New Michigan law strengthens energy efficiency and renewable energy standards

Blog | December 21, 2016 - 10:53 am
By Martin Kushler, Senior Fellow

Looking for some good clean energy news to close the year? In Michigan today, Governor Rick Snyder signed two sweeping bills that the state's legislature passed on December 15th, the last day of its end-of-year ‘lame duck’ session. The legislation extends and improves both the Energy Efficiency Resource Standard (EERS) and the Renewable Portfolio Standard (RPS).

The EERS bill, SB 438, officially endorses and extends the state’s 1% annual energy savings requirement for utilities through 2021. It also removes the existing cap on energy efficiency program spending, adds tiered incentives to encourage utilities to exceed 1.5% annual savings, and increases the previous RPS requirement for renewable electricity from 10% to 15%.

This accomplishment is particularly noteworthy and encouraging, because both chambers of the Michigan legislature are dominated by the GOP, and Governor Snyder is a Republican as well. Snyder had previously announced his support, saying the new legislation will “save Michigan residents millions of dollars on their electric bills” and “find new ways to use our existing energy grid more efficiently.”

Several other Midwest states like Indiana, Ohio, and Wisconsin with similar political lineups have recently experienced setbacks to clean energy policy. Moreover, the original legislative proposals in Michigan last year called for eliminating the EERS and the RPS policies, under a call to “end the mandates.”

What accounts for this striking turnaround in Michigan? Admittedly, the clean energy elements of the legislation were part of a complex compromise package of energy policy reforms, particularly involving electric reliability and customer access to independent electricity suppliers. The need for a compromise package made these advancements possible. 

But an impressive and diverse collection of parties deserves credit for these energy policy improvements. They include a strong coalition of environmental and clean energy advocates, a well-organized group of major corporations supporting energy efficiency, some key conservative groups in Michigan, and good vocal support from the governor’s office. It should also be noted that the legislative leadership on both sides of the aisle showed good faith willingness to negotiate and support a positive bipartisan package.

Hopefully, this recently completed process and successful outcome for clean energy policies in Michigan will be a good example for state and federal action in 2017 and beyond.