Sen. Jansen: Energy legislation passage dooms Michigan to massive rate hikes, elimination of competition
LANSING — Sen. Mark C. Jansen, R-Gaines Township, expressed disappointment today on passage of legislation that will lead to massive electric rate increases and return Michigan to an era of utility monopolies.
“Businesses and individuals can choose to be energy efficient, buy renewable energy or green products,” Jansen said. “By passing these bills the Legislature will be artificially creating a greater demand for renewable energy. The government should not interfere with this matter.”
House Bill 5524 and Senate Bill 213 were approved by both the House of Representatives and Senate today. Gov. Jennifer Granholm is expected to sign both bills into law.
HB 5524 will reverse changes made to Michigan’s electric market in 2000 that fostered competition for the state’s two biggest utilities. The bill guarantees Detroit Edison and Consumers Energy 90 percent shares of the energy market in their respective territories.
The House measure also drastically reduces Michigan Public Service Commission oversight of rate increases and the construction of new power plants. The utilities will be allowed to charge customers for construction costs before they actually take place, and for cost overruns at new facilities of up to 10 percent.
SB 213 will establish a Renewable Portfolio Standard (RPS), mandating that Michigan receive 10 percent of its energy from renewable sources by 2015.
Due to the higher cost of these energy sources and the lack of infrastructure to produce and transmit them, electric customers will again foot the bill. It is estimated that the RPS will cost ratepayers more than $8 billion.
Meanwhile, doubts persist as to the ability of the state to meet the mandate, the reliability of renewable energy sources, and the validity of new job claims made by supporters.
In a Feb. 5, 2008 Lansing State Journal article, Granholm said the state “has the potential to create hundreds of thousands of new jobs” should the Legislature approve an RPS.
Contrary to these lofty claims, statistics from the renewable energy industry do not indicate substantial job creation from the implementation of the mandate.
The National Renewable Energy Laboratory, described as the nation’s primary laboratory for renewable energy and energy efficiency research and development, estimates a community can expect between two and five full-time jobs to be created with a 50-100 megawatt wind farm. As the most cost effective renewable energy, wind is expected to make up the majority of Michigan’s proposed RPS mandate.
To meet a 10 percent RPS, it is estimated that the state would require 3,680 megawatts of wind energy. Assuming approximately 73 wind farms producing 50-megawatts each would be necessary to meet the 10 percent mandate, Michigan residents can expect roughly 365 full-time jobs to be created. When taking into consideration the $8 billion in electric rate increases estimated by advocates of the mandate, each new job would cost customers approximately $20 million.
“While the promise of jobs is an enticing one, Michigan residents should get more than 365 full-time jobs considering the rate increases they’ll see on their monthly energy bills,” Jansen said.
Both bills now head to the governor.
Posted: Thursday, September 18, 2008
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